*i 


LIBRARY 

in 

University  of  California. 

Class 


■ 


V4jj/7t*v 


w 


1 


sat- 


■  - 


'mWk 


-     ■■::■■    ■  : 


'HEBAV 


THE 

Business  Man's  Vade  Mecum 


A  text  book  for  those  who   desire  to  combine 
in  their  work 


ACCURACY,  EFFICIENCY, 

SPEED,  SHORT  CUTS 


In  Nine  Parts. 


*. 


Coftyriglited  1903. 


OF  THE 

UNIVERSITY 

PUBLISHED   BY 

The  Book-Keeper  Publishing  Co.,  Ltd. 

DETROIT,    MICHIGAN. 


#$? 


' 


CONTENTS. 


How  to  do  without  a  Trial  Balance — or,  Popular  Checking  Systems. 
Also  the  science  of  Lightning  Addition. 


Equation  of  Payments — The  simplest  and  quickest  methods  of  Aver- 
aging Accounts. 

PART  III. 

Cost,  or  Manufacturers'  Accounts.  Explanation  of  principles  and  ex- 
amples fully  worked  out. 

PART  IV. 

Accounting  for  Municipalities,  Waterworks,  Public  Institutions.  De- 
benture and  Sinking  Fund  Tables. 

part  v. 

Accounting  for  Corporations,  explaining  organization,  use  of  Stock 
books,  opening  entries,  transfers  from  partnerships,  treatment  of  capital 
account,  etc. 

PART  VI. 

Accounting  for  the  Wholesale  Grocery  and  Hardware  Business.  Illus- 
trated by  forty  forms.  Special  attention  given  to  vouchers,  order  blanks, 
slip  checking  system,  time  records,  etc. 

PART  VII. 

Accounting  for  Retail  Stores,  such  as  coal,  bakeries,  creameries,  drugs, 
ice,  etc. 

PART  VIII. 

Time  Record  and  Pay-roll  Systems — up-to-date  methods  of  keeping 
account  of  time  on  salary,  day-work,  and  piece-work  in  businesses  of  dif- 
ferent kinds. 

PART  IX. 

The  Voucher  System.  Designed  for  the  assistance  of  those  who  wish 
an  up-to-date  system  of  recording  their  accounts  payable  and  securing  an 
efficient  check  on  same. 


1G01.14 


PRESS    OF 

TWB 


NJfedr«CP 


LTHS. 
DETROIT    MICH. 


PART  I 


How  to  do  Without  a 
Trial  I'alance. 


OF  THE     "^ 

UNIVERSITY 

OF 


Popular  Checking  Systems* 


THE  following  methods  are  principally  intended  for  the  book-keepet 
who  does  his  work  without  assistants,  or  with  not  more  than  one 
junior.  They  are  intended  as  a  help  in  the  way  of  showing  the  book- 
keeper how  to  obtain  complete  assurance  that  his  work  is  correct,  in 
advance  of  proving  it  to  be  correct. 

They  are  published  with  a  view  to  alleviate  and  remove  the  troubles  of 
the  Trial  Balance  by  illustrating  and  describing  the  various  methods  devised 
for  the  purpose. 

They  are  published  to  show  that  any  book-keeper  can,  if  he  wishes, 
with  very  little  trouble,  prove  his  work  each  day  and  have  his  balance  com- 
plete directly  the  last  item  for  the  month  has  been  posted,  and  are  designed 
to  show  how  the  Trial  Balance  may  be  absolutely  dispensed  with  except 
as  an  ornamental  statement. 


CHAPTER  I. 
The  Check  Figure. 

This  is  an  effective  but  laborious  check.  As  a  matter  of  fact,  all  checks 
are  laborious,  and  the  inventor  who  will  COMBINE  THE  CHECK  WITH 
THE  WORK,  so  that  no  extra  labor  is  involved,  has  yet  to  be  introduced. 

We  do  not  present  any  mathematical  explanation  of  the  check  figure, 
because  such  an  explanation  is  quite  unnecessary,  the  modus  operandi 
being  simple  and  easily  understood. 

The  check  figure  we  illustrate  is  "eleven."  Take  two  amounts  of  five 
figures  each.  Starting  at  the  right  hand,  add  the  first,  third  and  fifth 
figures  and  deduct  the  second  and  fourth.  If  the  latter  exceeds  the  former, 
add  ii  and  then  deduct.     The  result  is  the  proof  figure. 


(3 

(3         0 

0 

0 
s  ^ 

-  /o 
=   /o 

-  f 

# 

/    7  J 

S"f-/f^/9-/c  - 

</ 

6? 

©             <2) 

*0 

-    /  o 

/3 

6    ef    f 

JZ3  -/o  ~  /c? 

j-/=5 

/      ^?lC4-*Ut/> 


&&£ 


This  illustration  merely  shows  that  the  footing  is  correct,  the  footing 
of  the  check  figures  giving  the  same  check  figure  as  the  footing  of  the 
amounts.  But  if  these  amounts  are  posted  to  the  ledger  the  same  operation 
will  prove  the  accuracy  of  the  posting. 

We  will  suppose  that  our  book-keeper  is  enlightened  and  progressive, 
and  desires  to  prove  each  day's  work  as  he  goes  along,  so  as  to  be  able 


to  get  his  balance  promptly  without  trouble  on  the  first  day  of  the  month. 

He  will  post  from  his  sales-book,  or  ticket,  $484.26.  As  he  posts  the 
amount  in  the  ledger  he  extracts  his  proof  figure  "4,"  and  writes  it  in  the 
sales-book  in  a  column  which  he  arranges  for  the  purpose. 

The  proof  figure  of  the  footing  of  the  sales-book  will  then  prove  the 
accuracy  of  the  postings  to  the  ledger  for  the  day  by  agreeing  with  the 
footing  of  the  column  of  proof  figures  in  the  sales-book  which  represent 
the  postings  of  the  ledger.  The  same  operation  will  prove  the  accuracy  of 
the  day's  postings  from  cash  book,  journal,  purchase  record,  or  any  other 
book,  so  that  it  is  within  the  reach  of  every  book-keeper  with  extraordin- 
arily little  trouble  to  prove  each  day's  work  as  he  goes  along,  and  to  be 
free  from  all  bother  and  trouble  of  errors  when  he  endeavors  to  obtain 
his  monthly  trial  balance. 

In  order  to  make  this  matter  perfectly  clear*,  we  append  an  illustration 
representing  one  day's  work  from  the  cash  book  and  its  proof. 

The  amounts  posted  to  the  ledger  from  the  sundries  column  of  the 
cash  received  side  of  the  cash  book  are  represented  by  the  check  figures 
in  the  check  column,  the  footing  of  which  is  29,  or  9 — 2=7.  The  check 
figure  extracted  from  the  total  of  the  sundries  column — $12,578.68 — is  also 
"7,"  thus  proving  the  postings  to  be  correct  for  the  day.     The  postings 


No.  1 

Cas 

K      P 

eceived. 

Date- 

Nc^rne& 

[olio 

ChecK 

Sundries 

Cev&K  Sales 

factory 

Int&i  Diact 

July  1. 

Amounts  fopci. 
f.  EL.Bpi'sco. 
C.Chur=chill 
A.MilleP         - 
AT"Canfield 

45 

176 

13 

96 

4 
2 
7 
1  O 
6 

12 

198 
193 
165 
6 
■!3 

DO 

81 
A& 

117 

20 

345 

26 

.56 

oO 

7     Ha 

573 

06 

from  sales-book,  journal,  etc.,  are  treated  in  like  manner,  each  section  of 
the  work  being  thus  proved  separately  and  easily. 

In  entering  balances  from  the  ledger  into  the  trial  balance  book  the 
check  figure  should  be  extracted  first,  and  the  amount  copied  from  the 
ledger  after.  The  footing  of  the  check  figures  will  then  check  the  correct- 
ness of  the  amounts  in  the  trial  balance  book,  which  have  been  copied 
from  the  ledger,  and  any  errors  will  be  promptly  located. 

But  the  check  figure,  unfortunately,  is  not  infallible.  It  is,  of  course, 
quite  possible  to  make  a  mistake  in  extracting  it,  but  the  check  figure  is 
not  proof  against  all  errors,  even  when  correctly  extended,  as  the  follow- 
ing example  will  show : 


No. 2 

Series 

Boo 

K. 

Dale 

Names 

Fblio 

Ch 

ecK 

Amounts 

Julvl 

A.&  Little  &  Son 

87 

9 

126 

15 

/ 

<S>.  F7  Dpowh  o{  Co. 

228 

A 

AO 

63 

tlammond  M-fo.Co. 

229 

1 

A5 

J.O^ndfbr^d 

!  IO 

IO 

1  O 

2 

21  1 

3& 

The  postings  are  represented  by  the  check  figures,  the  footing  of 
which  amounts  to  "2,"  which  is  the  check  figure  of  the  total  of  the  amounts 
posted.  The  postings  are  therefore  supposed  to  have  been  correctly  made. 
This  is  the  way,  however,  in  which  the  postings  appear  in  the  ledger: 

The  check  figures  are  inserted  here  merely  for  the  purpose  of  com- 
parison with  those  in  the  sales-book. 

In  such  a  case,  it  is  evident  that  the  check  figure  certifies  the  work 
as  accurate  when  it  is  $34.65  out  of  balance,  $45.10  having  been  posted 
as  $10.45.  This  is  a  very  simple  illustration,  but  quite  good  enough  for 
the  purpose.     In  order  to  get  over  this  difficulty  it  is  now  proposed  to 


A.b.LittteUSory 

Leddien 

/^                    S .  FT  D  nown 

Date 

Folio 

Debits 

CpediteJDalS 

folio    Deb.tS 

Oedite 

Julyl 

Mide-e.          ®        122 

1 26-15 

Julvl 

Mcdse.      <&> 

122 

40 

63 

/ 

/ 

. 

Mammond    M'fc£.  Go 

Date! 

foliolDeb.13 

Cpedifej|Do.te 

iFoHo 

Debits 

Cpedite 

Julyl 

Mdse             © 

I22 

4^ 

Julyl 

Mctee         & 

122 

10 

7 

' 

. 

..  . 

extend  the  last  unit  posted,  by  the  side  of  the  check  figure,  footing  these 
units  and  comparing  with  the  footing  of  the  same  units  in  the  book  of 
original  entry  from  which  the  postings  are  made.     (See  illustration.) 

If  $45  is  posted  as  45  cents  the  figure  "5"  would  be  extended  to  the 
left  of  the  check  figure,  the  addition  of  these  units  would  be  "13,"  instead 
of  "8,"  and  the  error  would  be  immediately  discovered.  But  if  10  cents 
is  posted  as  $10.00  or  $10.00  is  posted  as  10  cents,  a  cipher  would  be  ex- 
tended to  the  left  of  the  check  figure  in  each  instance,  and  notwithstanding 
all  the  checks,  the  books  would  be  out  of  balance  $9.90. 

Thus,  if  $45.00  is  posted  as  45  cents,  the  footings  of  the  columns  of 


N0.3 

Sales 

booK. 

Date 

Names. 

Folio 

ChecK 

Amounts 

Julyl 

A  E>  Little  ^5on 

87 

59 

126 

15 

/ 

S.f^  E>Pown&Go. 

228 

34 

AO 

63 

flammond  Mfo.Co. 

229 

0  1 

A3 

«J.  Sand  fond. 

!  IO 

°IO 

IO 

^2 

2  1  1 

66 

units  would  discover  a  disagreement  of  5  cents  and  promptly  locate  the 
erroneous  posting.  But,  on  the  other  hand,  if  $10  should  be  posted  as  10 
cents,  or  $50  as  50  cents,  this  additional  check  would  be  labor  lost ;  and 
as  in  6,000  postings  in  a  week  it  would  require  the  writing  of  6,000  addi- 
tional figures,  and  as  the  writing  of  6,000  figures  takes  a  great  deal  of  time 
(as  any  book-keeper  may  prove  for  himself),  we  unhesitatingly  denounce 
this  additional  check  as  worthless,  taking  into  consideration  the  extra  labor 
involved. 


The  check  figure  itself  we  believe  to  be  a  great  boon  to  book-keepers, 
and  those  who  use  it  with  care  and  intelligence  undoubtedly  derive  solid 
advantages  which  they  are  only  too  glad  to  appreciate  and  acknowledge. 


CHAPTER  II. 
The  Slip  System,  or  Reverse  Posting  and  the  Check  Ledger. 

This  is  a  very  effective,  but  also  laborious,  check.  The  labor,  how- 
ever, of  finding  errors  in  a  trial  balance  is  greater,  and  is  the  most  unsatis- 
factory labor  a  book-keeper  can  possibly  have  to  perform. 

The  great  end  in  view  is  to  abolish  the  trial  balance  as  an  important 
factor  in  accounting.  As  an  ornamental  statement  to  produce  to  employers 
it  may  be  all  right,  and,  to  that  exent,  useful;  but  so  far  as  book-keepers 
are  concerned,  progressive  accounting  leads  to  the  ability  to  prove  the  work 
on  the  books  to  be  in  balance  at  any  moment. 

By  the  Slip  System,  the  books  can  be  balanced  every  day,  and  a  trial 
balance  can  be  produced  whenever  required.  It  is  particularly  applicable 
to  the  needs  of  book-keepers  for  concerns  of  comparatively  small  magnitude. 

The  modus  operandi  is  very  simple  and  is  as  follows : 

Rule  a  sheet  of  paper  with  debit  and  credit  columns   for  each  book 
from  which  postings  are  made.     It  is  best  to  have  separate  sheets  for  debits 
and  for  credits.     If  the  books  of  original  entry  are  merely: 
Cash  Book,  Sales  Book, 

Journal,  Invoice  Book, 

your  "slip"  will  be  ruled  as  per  illustration. 

The  credit  sheet  will  be  ruled  similarly. 

When  posting  debits  the  book-keeper  will  place  the  "slip"  at  his  right 
hand  side  and  will  copy  his  postings  from  the  ledger  into  the  column  which 
represents  the  book  from  which  he  has  posted.  At  the  close  of  the  day 
the  book-keeper  will  foot  the  columns  of  his  "slips"  and  compare  the  foot- 
ings of  each  column  with  the  footings  of  the  charges  and  credits  in  cash 
book,  journal,  sales  book  and  invoice  book  for  the  day.  If  the  footings 
agree  he  will  know  that  his  postings  are  correct  and  that  his  ledger  is  in 
balance.  If  the  footings  of  any  particular  column  do  not  agree  he  will 
check  back,  find  his  error,  and  correct  it. 

And  when  he  takes  his  trial  balance,  if.  it  does  not  come  out  exactly 
right,  the  book-keeper  knows  that  the  error  must  have  occurred  in  drawing 
off  the  balance,  and  consequently  can  find  the  error  with  facility. 

Progressive  book-keepers  who  use  columnar  cash  books  and  journals 


DEBIT 

SMCET 

CAS/i 

^OUtfNAL 

SALES       |  P(S/ZC/7AS£S  \ 

will,  of  course,  provide  the  same  columns  on  their  "slips"  as  their  cash 
books  and  journals  contain.  When  a  mistake  occurs  they  will  thus  be  able 
to  locate  it  not  only  to  the  book,  but  to  the  column  of  the  book  where  it 
will  be  found.  • 

Out  of  this  "Slip"  or  "Reverse  Posting"  has  been  evolved  the  extra- 
ordinary idea  of  a  "Check  Ledger."  This  ledger  has  not  a  very  large 
patronage,  but  has  been  tried  by  some  large  corporations.     It  is  a  small 


Ki 


ledger  ruled  with  the  regular  debit  and  credit  columns,  and  a  clerk  is  pro- 
vided whose  duty  it  is  to  open  accounts  in  it  which  will  correspond  with 
the  accounts  in  the  real  ledger. 

The  check  ledger  book-keeper  goes  over  all  the  items  already  posted  to 
the  real  ledgers  and  posts  them  (the  figures  only)  again  in  the  check 
ledger.  He  then  compares  his  balances  with  the  balances  on  the  real  ledgers 
and  adjusts  the  differences. 

We  do  not  suppose  any  more  inefficient  check  was  ever  devised.  The 
majority  of  the  mistakes  made  are  usually  found  in  the  check  ledger,  the 
postings  to  which  are  always  made  hurriedly,  and  are  therefore  more  than 
usually  susceptible  to  error. 

CHAPTER  III. 
Sectional  Ledgers,  Cash  Book  and  Journals. 

This  article  is  addressed  to  a  suppositious  book-keeper  who  keeps  the 
books  of  a  mercantile  house  dealing  in  hats,  gloves  and  hosiery — three  de- 
partments. 

It  does  not  matter  particularly  what  system  of  book-keeping  is  used, 
our  remarks  can  be  applied  equally  as  well  to  one  system  as  another.  Hav- 
ing obtained  a  ledger  and  journal  of  some  kind,  the  book-keeper  will  divide 
his  ledger  into  sections — one  section  for  city  accounts,  one  for  country  ac- 
counts, one  for  purchase  accounts,  and  one  for  sundry  accounts.  He  will 
also  divide  his  sales  journal  into  three  sections — one  for  hats,  one  for  gloves, 
and  one  for  hosiery.  If  the  president  of  the  company  will  not  stand  the 
expense  of  a  proper  cash  book,  the  book-keeper  will  purchase  some  kind 
of  a  book  which  has  only  horizontal  rulings,  and  will  rule  for  himself,  day 
by  day  as  required,  the  following  columns.     On  the  debit  side : 


City                Country 
Accounts".    ||Accounfs~ 

FuncKaea 
Accounts. 

Sundry 
.A,  c counts. 

Me.-rsr 

Gloves      Mosieny. 

On  the  credit  side  of  the  cash  book  the  book-keeper  will  provide  similar 
columns,  together  with  such  expense  columns  as  he  can  find  room  for,  post- 
ing the  totals  of  the  expense  columns  monthly  instead  of  posting  individual 
items. 

The  cross-entry,  or  pro  and  con,  journal,  should  be  similarly  arranged. 

All  department  sales  on  credit  should  be  entered  in  their  respective 
columns  in  the  journal  to  the  credit  of  such  departments. 

All  department  sales  for  cash  should  be  entered  in  their  respective 
columns  on  the  debit  side  of  the  cash  book. 

All  department  purchases  on  credit,  or  returns  from,  or  allowances 
to  customers,  should  be  entered  in  their  proper  columns  on  the  debit  side 
of  the  journal. 

All  department  purchases  for  cash  should  be  entered  in  their  proper 
columns  on  the  credit  side  of  cash. 

We  have  stated  that  the  ledger  will  be  divided  into  four  sections.  The 
sundry  account  section  will  be  the  sun  around  which  all  the  other  sections 
revolve — the  pivot  of  the  constellation,  the  key  to  the  system.     This  section 


11 


will  contain  accounts  with  the  other  three  sections.  The  account  with  the 
city  accounts  section  will  charge  that  section  with  all  city  debits,  and  credit 
it  with  all  city  receipts,  allowances,  etc.  The  balance  of  this  account  will 
equal  the  total  of  the  balances  in  the  city  accounts  section. 

The  balance  of  the  account  with  the  country  accounts  section  will 
equal  the  total  of  the  balances  in  the  country  accounts  section. 

The  balance  of  the  account  with  the  purchase  accounts  section  will 
equal  the  total  of  the  balances  in  the  country  accounts  section. 

The  sundry  accounts  section  will  be  self-balancing. 

To  illustrate  how  this  is  done  we  will  take  the  hat  department  for  the 
month  of  June,  1898,  and  show  a  trial  balance  of  the  sundry  accounts 
section. 

Purchases  of  hats  on  credit  during  month,  $800. 

This  will  be  the  total  of  journal  credits  and  it  will  be  debited  in  hat 
column — one  posting  at  end  of  month. 

Purchases  of  hats  or  hat  material  for  cash,  $178. 

This  is  total  of  hat  column  credit  side  of  cash. 

Cash  sales  of  hats,  $750. 

This  is  total  of  hat  column  debit  side  of  cash. 

Credit  sales  of  hats  $620. 

This  is  total  of  sales  book  credited  to  hats  and  debited  to  city  accounts 
account  or  country  accounts  account  on  journal. 

At  the  close  of  the  month  the  totals  of  all  columns  in  cash  book  and 
journal  (except  sundry  columns),  will  be  posted  to  their  respective  accounts 
in  the  sundry  accounts  section.  The  totals  of  each  section  of  ledger  column 
are  posted  to  the  debit  and  credit  of  each  section  of  ledger  accounts. 

The  results  will  be  as  follows: 

HAT  ACCOUNTS  WILL  SHOW : 

DEBIT. 

Hats  on  hand  June  1st $  485  00 

Hats  purchased,  cash 178  00 

Hats  purchased,  journal 800  00 

Bal.  to  gain  and  loss 250  00 

$1,713  00 

CREDIT. 

Hats  sold,  cash $    y^Q  00 

Hats  sold,  journal *62o  00 

Hats  on  hand,  July  1st  343  00 

$1,713  00 
CITY  ACCOUNTS  WILL  SHOW: 

DEBIT. 

Customers'  balances  June  1st   $  765  48 

*Hat  sales  620  00 

Glove    sales    378  r0 

Hosiery  sales  ^89  75 

$2,353  73 
12 


CREDIT. 

Hats,  cash  $  725  oo 

Gloves,  cash   360  00 

Hosiery,  cash  625  00 

Customers'  balances  July  1st 643  73 

$2,353  73 
Gloves  and  hosiery  accounts,  country  accounts  account  and  purchase 
accounts  account  will  be  similarly  arranged. 

The  method  of  checking  the  total  balances  of  city  accounts,  country 
accounts,  and  purchase  accounts  sections  of  the  ledger  have  been  previously 
described.  These  sections  having  been  balanced,  it  only  remains  to  take 
a  trial  balance  of  the  sundry  accounts  section,  as  per  following  illustration : 

DEBITS. 

City  accounts  receivable $    643  73 

Country  accounts  receivable T>947  20 

Cash   246  25 

Bank  4,750  00 

Fixtures  and  fittings   600  00 

Hats,  mdse 343  00 

Gloves,  mdse   295  50 

Hosiery,  mdse   450  00 

Expense  265  00 

Freight  78  50 

Wages 1,250  00 

$10,853  18 

CREDITS. 

Capital $5,000  00 

Purchase  accounts  3,200  00 

Bills  payable    1,000  00 

Surplus  from  mdse 1,653  J8 

$10,853  18 
(Inventory  taken  monthly.) 

This  system  can  be  carried  out  to  any  extent.  If  the  book-keeper  will 
provide  himself  with  cash  books  and  what  are  called  trial  journals,  with 
sufficient  columns,  he  can  divide  each  section  of  his  ledger  alphabetically, 
and  prove  each  section  separately,  opening  an  account  in  his  sundry  ac- 
counts section  with  each  alphabetical  division  instead  of  with  each  section. 
This  will  be  found  very  useful  in  some  businesses  where  the  number  of 
customers'  accounts  is  very  large. 

The  departmental  accounts  will  show  the  gross  profits  made  in  each 
department  for  each  period  when  inventory  is  taken. 


CHAPTER  IV. 

Self-Proving  Accounting  Systems. 

This  is  the  title  now  generally  used  to  describe  the  "Boston  Bank  Bal- 
ance Ledgers,"  and  mercantile  ledgers  arranged  on  the  same  principle.  The 
Boston  Bank  Ledger  is  arranged  as  follows : 

13 


— 

-*: 

. 

m 

Turanflr: 

(ill 

- 

1R0 

WFDNFRr>*y 

- 

-'- 

..     TnuRSOM 

i» 

FRinnr 

m 

SaTURDAt 

w 



I 

T= 

-.:. 

rzzr 

-..'J 

;:;;- 

„. 

SZ    ~ 

f  ■ : 

Nil  1 

' 

- 

: 

i hi  i 

• 

\ 

MM  1 

1     1 

The  Mercantile  Balance  Ledger  is  arranged  as  follows: 


MARCH  IB99 


To  prove  the  correctness  of  your  work  in  any  section,  add  your  bal- 
ances at  the  commencement  of  the  period  to  the  total  debits,  deduct  the 
credits,  foot  the  balances  at  the  conclusion  of  the  period  and  the  result 
should  show  thus : 

Total  balances  of  Ledger  A,  January  ist $19,504  72. 

Total  debits,  January  2d 4,872  92 


$24,287  64 
Total  credits,  January  2d 5,809  80 


Total  balances  of  Ledger  A,  January  2d $18,477  84 

The  total  balances  on  January  2d  are  proved  in  two  ways: 
•  ILLUSTRATION    Or    LEDGER   PROOrS  • 


Names. 


"Total    Balances 
-fr°om  Monday  Jan.  I§T 


Bal.   fbpd.     fclio    Dek.itS   fghol  Ci»e<Mitel  BaI.  fop'd. 


19504 


Odtal 


(ToteH ) 

580980 


It  will  be  seen  by  these  illustrations  that  the  system  has  merit,  for  the 
reason  that  it  localizes  different  sections  of  accounts  and  admits  of  their 
being  proved  separately  by  the  method  indicated. 

riRST  PRoor. 


ToleJ  Balances  •jora'd.'fpom  Jan.l^"l9504.72 

Deb'ffS  Jaqg.'J  478292 

2428764 


TolSl  Cpedife  Jan.2^  5809.80 
Balfi-for-'d.    "   ^1847784 
2428764 


Thus,  the  postings  of  a  given  page,  or  series  of  pages,  collectively  can 

be  footed  and  compared  in  a  way  to  demonstrate  the  accuracy  of  the  work. 

In  other  words,  if  the  book-keeper  will  provide  a  separate  column  in 


II 


cash  book  and  journal  for  each  page  of  the  ledger  the  footing  of  those 
columns  in  cash  book  and  journal  added  together  will  always  equal  the 


SECOND  PDOOn 

"Total  Balances  fopcLfpom  Jan.l-  19504.72 

Cash  peceipta 

519025 

£>^es                                                 "     1*    4434.60 

Discounted 

37890 

UouPneM    DebilS.                     "    r         348.32  Jour=n».l  Allowances 

] 

RetuPOfc   etc. etc. 

J        240.65 

lolal   Balances | 

-fop'd.lb  Jan,  ^  ) 

1847784 

2428764 

2428764 

footing  of  the  debits  and  credits  of  the  accounts  posted  to  that  particular 
page  of  the  ledger. 

In  the  ledger,  arrange  tfce  debits  and  credits  in  sections,  and  provide 
separate  columns  for  the  balances,  as  shown  by  the  illustrations.  If  you 
are  a  bank,  keep  your  debits  and  credits  in  sections  of  days.  If  you  are 
an  ordinary  mercantile  house  keep  your  debits  and  credits  in  sections  of 
months.  If  you  do  not  do  very  much  business  keep  your  debits  and  credits 
in  sections  of  periods  of  three  months,  etc. 


CHAPTER  V. 


Lightning  Addition. 

Lightning  addition  can  be  acquired  by  hard  work,  just  as  Schaefer  and 
Ives  learned  how  to  play  lightning  and  accurate  billiards;  but  in  each 
case  it  is  necessary  to  kow  how  to  learn.  The  average  clerk  might  have 
nothing  to  do  all  his  life  but  add  7  and  9,  or  5  and  6,  and  do  it  all  his  life 
at  the  same  rate  of  speed,  only  accelerated  by  his  familiarity  with  the  work. 

By  the  method  we  append  we  offer  the  means  of  becoming  "lightning 
additionists'  if  students  will  only  work  hard  enough  and  long  enough.  The 
capacity  to  add  rapidly  is  really  the  capacity  to  group  the  figures  to  be 
added.  Thus,  you  must  not  think  of  2,  7,  9,  as  2+7+9—18,  but  you  must 
see  at  a  glance  that  it  reads— "8."  You  must  put  the  "8"  into  one  pocket 
and  the  "10"  into  another  pocket.  If  the  next  three  figures  are  9,  6,  5,  you 
must  read  them  as  "o"  and  put  the  "20"  into  your  other  pocket  along  with 
the  "10.". 

In  order  to  acquire  this  satisfactory  habit,  which  will  enable  anyone 
to  foot  a  column  of  ordinary  size  in  less  than  the  twinkling  of  an  eye,  the 
best  plan  is  to  get  some  plain  cards  ad  mark  them  thus: 


Make  a  set  for  each  numeral,  shuffle  them  well,  and  then  throw  them 
down  as  fast  as  possible  one  after  another,  calling  the  total  without  tens. 
Thus,  the  4  and  9  combination  is  to  be  known  as  "3."  After  the  student 
is  sufficiently  familiar  with  the  first  combination,  let  him  make  out  another 
set  of  cards  on  the  second  combination  as  above  illustrated,  viz : 


15 


444444444 
i  i  i  i  i  i  i  i  i 
123456789 


By  the  time  this  second  combination  has  been  thoroughly  mastered  it 
will  probably  be  found  necessary  to  proceed  to  the  third,  as  the  speed 
obtained  will  be  sufficient,  not  only  for  all  commercial  purposes,  but  to 
place  the  possessor  far  ahead  of  any  ordinary  business  competitor. 


PART  II. 


Equation  of  Payments. 


Averaging  Accounts, 


CHAPTER   I. 
How  to  Average  an  Account. 

THERE  are  many  methods  of  "averaging  accounts,"  which  is  one  title  of 
that  arithmetical  formula  known  as  "equation  of  payments"— the  deter- 
mining or  finding  of  the  balance  of  interest  due  on  an  account,  or  find- 
ing the  common  time  of  maturity  of  bills  due  at  different  times. 

The  general  principle  involved  is  simple.  Charge  interest  from  due 
date  on  amount  owing;  credit  interest  on  amounts  received  in  payment,  or 
part  payment ;  the  balance  will  be  the  interest  due.  On  large  accounts  with 
numerous  charges  and  credits  it  is  a  laborious  task  to  obtain  this  balance, 
and  hence,  mathematicians  have  devised  many  methods  which  were  more 
or  less  shortcuts.  In  fact,  so  many  methods  have  been  devised  that  it  is 
quite  confusing,  and  a  thankless  task,  to  study  them  all  and  follow  up 
the  different  reasons  for  the  different  rules. 

The  rules  apper.e.d  for  Single  and  Double  Averages  are  simple,  good, 
and  easily  borne  in  mind,  and  will  answer  every  purpose. 
SINGLE  AVERAGE. 

Set  down  the  items  in  their  order  of  due  date. 

Calculate  the  number  of  days  between  the  first  and  seconds  items,  and 
multiply  the  amount  of  the  second  item  by  the  number  of  days.  This  is 
called  the  product  for  average.  Proceed  in  like  manner  with  each  succeed- 
ing item. 

Foot  the  items  and  products  for  average. 

Divide  the  latter  amount  by  the  first.  The  result  will  give  the  number 
of  days  forward  from  the  date  of  the  first  item,  which  added  to  that  date 
will  give  the  average  due  date  of  the  account. 

Calculate  interest  at  the  required  rate  on  the  sum  of  the  account  from 
the  average  due  date  to  the  date  of  rendering  statement. 


I-atg  of  |g'E>,li        I    A-.^-^^g 


fcby 

Mi'k 


I  oo 


AO 

eo 
9<3 


AOOO 

feooo 

9QQg 


E><a-s»i.=>-  360  day*  "fe.    yean 


^19000 


lay-d  fon>wAr^d    fr*orr\    fcB> 


47-1    d 

Avcps 


1.5 


due  do-fe    /Xpl.Z'/z  „,, 


PROOF. 

Interest  on  $100.00  at  6  per  cent  from  Feb.  15  to  June  1 .  .$1  75 

Interest  on  $100.00  at  6  per  cent  from  March  25  to  June  1   1  08 

Interest  on  $100.00  at  6  per  cent  from  April  15  to  June  1  75 

Interest  on  $100.00  at  6  per  cent  from  May  15  to  June  1  25 


$3  83 


DOUBLE  AVERAGE. 

Assume  as  the  basis  for  finding  the  average  the  ist  of  the  month  in 
which  the  first  charge  is  made.    This  is  called  the  "Focal  Date." 


Calculate  the  number  of  days  from  the  Focal  Date  to  the  date  of  each 
charge,  or  to  the  due  date  if  it  is  a  time  charge. 

Multiply  the  amount  of  each  charge  by  the  number  of  days  obtained. 
This  gives  the  "Product  for  averaging." 

Add  the  debit  items  of  the  statement  and  the  "Product  for  averaging" 
column. 

CREDITS. 

Calculate  the  number  of  days  from  the  Focal  Date  to  the  date  of  each 
credit. 

Multiply  the  amount  of  each  credit  by  the  number  of  days  obtained, 
which  gives  the  "Product  for  averaging. 

Add  the  credit  items  of  the  statement  and  the  "Product  for  averaging" 
column. 

Deduct  the  total  of  the  credits  from  the  total  of  the  debits,  and  the  total 
of  the  credit  "products"  from  he  total  of  the  debit  "Products." 

Divide  the  balance  of  the  "Product"  columns  by  the  balance  of  the 
"Items"  or  "Amount"  columns.  This  will  give  the  number  of  days  forward 
from  the  Focal  Date  when  the  balance  of  the  account  was,  or  will  be  due. 
This  is  the  average  Due  Date  of  the  Account. 

Calculate  interest  on  the  balance  of  the  account  for  the  period  of  time 
elapsed  between  the  Average  Due  Date  and  date  of  rendering  statement. 


Da-fe  of  5<:1tl; 


Toe  at    Dtfc      [cby.  le? 


Matured     Arr\ourV»~    D<: 
Dati         of  O.I 


rSb'y 
McK 
Apr=> 

May 


ioo 

IOO 
IOO 

IOO 


S3 


Dafc 


I500 
.5.500 
7300 
IQ5gQ 


vo 

IOO 

1 30 


7000 

\oooo 
6500 


23500 


AOO 

I50 


25000 
23500 


250 


I O  days  feow^r>d  fr>onr\  feb'y    I*" 

;  Dtfrz       F£b'y    IO**  „  +        „         c^ 

r>  *loO  •  f«om  Rby  lO1*   "to  dvlv  l#-  *3>5-0 


Total  time— Feb.  1  (Focal  date)  to  July  1  (date  of  settlement)— 5  months 

=  150  days. 

Divide  total  "product"  of  debits  by  amount  of  charges. 

Deduct  result  from  total  days  and  calculate  interest  on  total  charges  for 
balance  of  days  obtained. 

Divide  total  "product"  of  credits  by  amount  of  credits. 

Deduct  result  from  total  days  and  calculate  interest  on  total  credits  for 
balance  of  days  obtained. 

The  difference  between  debit  interest  and  credit  interest  will  be  the 
amount  of  interest  due. 


Total  Chores. 

4ooob 

Total    Cnedife 
2..SO  00 


Tbtoi  Product 

I    2-3QOO    OO 


"To1i>l   Pnodi 
\   23  .^OO   OO 


1 1  me 
I50    days       „ 


QT7  '/z  day» 


a~7  /z  D<ay: 
^6 


S^a  Less      •    SA        ■■       DifTer=>enoe.  v5€>    d^y.3 

rtt&r»caSt"@©%>      e>'>   OE&IT&    -4oO-°    -     *>  s5.©3 
-      -  CQCDi  T<5  ■   2ao  °°    =     ■#■   2.33 

IrytcncJSt-  due   Uj^ly     l-ST  =fr.3,50 


As  a  matter  of  fact  the  formula  of  the  proof  is  as  good,  if  not  better, 
than  the  formula  of  the  original,  because  it  seems  more  complete.  A  further 
illustration  is,  therefore,  given,  showing  the  double  average  thus  obtained. 


Total  days  from  Jan.  1  (Focal  date)  to  May  1  (date  of  settlement)  120  days. 

Debits— Total  days  120—55^=64^.  Interest  at  6 %  on  $230  oo=$2  47 
Credits — Total  lays  120 — 85     =35     .  Interest  at  6%  on  $100  00=       58 


Interest  due  May  1 $1  89 

What  is  called  the  "Interest  Process  of  Averaging  Accounts"  is  so  gen- 
erally used  that  an  illustration  is  hereto  appended  in  order  to  complete  the 
subject.  By  this  method  the  interest  is  separately  extracted  in  each  calcu- 
lation, the  credits  are  subtracted  from  the  debits,  and  the  result  is  the  same 
with  a  little  more  labor. 


C>a"te-   of     ^>«»++lcnaerSt" 


M^y    I' 


DEBITS 

ooE.Di-r-3 

Date. 

Amount 

D^iStr.^ 

lnf«Pc»t 

Date 

Amount 

Dafc 

May    1 

Interest 

R=.b     15 

McK  15 
Apl    15 

60 
BO 

4o 
50 

L 

la*    r 

105 

75 
45 
15 

' 

0  5 

30 

1  ? 

N/tek   10 
Apl     10 

ss 

6"/. 

20 

42 

2 
it* 

A -7 

5-3 

ur.  May    1 

*        1 

- 

There  are  numerous  other  methods  of  obtaining  average  due  dates,  and 
amount  of  interest  due  at  a  given  date,  but  the  methods  above  described  will 
answer  every  ordinary  business  requirement. 

In  cases  of  "freak"  averages,  where  the  average  due  date  will  be  found 
prior  to  date  of  first  charge,  it  will  be  well  to  bear  in  mind  that  where  the 
preponderance  of  weight  is  all  on  one  side  no  average  can  be  struck. 

The  average  due  date  of  an  account  is  the  theoretical  time  the  NET 
BALANCE  must  have  run  to  produce  at  a  given  date  the  correct  amount 
of  interest  on  that  balance. 


Date  of  settlement  assumed  as  Focal  Date. 
Nov.  ist  date  of  settlement. 

1894  DR.  1894  CK. 

May  14,  $500  X  166 $83,000        July    9,  $40oX  1 1 1 $44,400 

June  16,    800X134 107,200         Sept.  11,    600X  49 29,400 

July  21,    300X98 29,700        Oct.  29,     200X     1 200 


1,600  $219,900  $1,200  $74,000 

1 ,200  74,ooo 

364  days  back  of  Nov.  ist. 


$400  $145,900  Average  date,  Oct.  26,  1893. 


Credit  amounts  in  excess  of  Debit  amounts. 
May  ist,  Focal  Date. 

1894  DR.  1894  CR. 

May  14,  $500X14 $7,000        June    9^400X69 $27,600 

June  16,    800X46 36,800        Sept.  11,    600X131 78,600 

July  21,    300X81 24,300        Oct.  29,     200X179 35,8oo 


1,600                           $68,100  1,200  142,000 

1,200  68,100 


400  $73. 9°° 

4/739/184  days  back  of  May  ist 
Average  date  Oct.  26,  1893. 

365  days'  interest  at  6%  on  $400.00 $24.20 

Proof.  May  ist  to  Nov.  ist  date  of  settlement — 180  days. 

1600/68100/43  days.  .  1200/142000/ 118  days. 

6400 


4100 

180 —  43=137  days  interest  on  $1,600.00  at  6% $36.54 

180 — 118=  62  days  interest  on  $1,200.00  at  6% 12.40 

Interest  due $24.14 


CHAPTER  II. 

Another  Method  of  Averaging  Accounts  and  Computing  Interest. 

SIMPLE  AVERAGE. 

Arrange  the  items  in  order  of  date.     Use  due  date,  if  any. 

Carry  out  balance  of  account  on  each  date  after  items  on  that  date  have 
been  entered.    With  every  new  entry  there  is,  therefore,  a  new  balance. 

Multiply  each  balance  by  the  time  intervening  between  its  date  and  the 
next  succeeding  entry. 

Add  amounts  so  obtained  and  divide  by  balance  of  account.  The  quo- 
tient will  be  the  number  of  days  to  count  backward  from  latest  date,  which 
will  give  average  due  date. 

Compute  one  day's  interest  on  total  of  "Amounts"  column  (if  time  has 
been  computed  in  days-  which  will  be  the  balance  of  interest  due  at  latest 
date. 

0 


Int.  rate  5%. 

1895.  Dr.  BKes  Da*s  Amounts 

Dec.  23  $1,000     $1,000     15     $  15,000 

(Dec.  23  to  Jan.  7.) 

Jan.  7   500  1,500  20  30,000 

Jan.  27   2,000  3,500  14  49,000 

Feb.    10    200  3,700  15  55.500 

Feb.   25    300  4,000  10  40,000 

March    7    1,000  5,000 

$5,000  74  $189,500 

$189,500-^5000=37.9  days  back  from  March  7=January  28  equated 
due  date. 

$189,500®  5%  for  one  day=$25-96,  interest  due,  March  7.  Total  due 
March  7,  $5,025.96. 

COMPOUND  AVERAGE. 

Proceed  as  before,  but  deducting  credit  "Amounts"  from  debit 
"Amounts"  and  dealing  with  the  balance. 

Required  amount  due  Feb.  19,  '96.  Int.  rate  J%. 

Dr.  Cr.  Dr.  Bal.        Cr.  Bal.        Days        Dr.  Amts.         Cr.  Amts 

Dec.    i    $1,000                    $1,000  7  $7,000 

Dec.   8    $800            200  12  2,400 

Dec.    20    500  $300       20  $6,000 

1896. 

Jan.  9 600                         300  9  2,700 

Jan.  18  700                       1,000  32  32,000 

Feb.  19 $44,100       $6,000 

44,100 — 6000=38, ioo-w 000    (net    Dr.   balance)=38,     1-10   days   back 

from  Feb.  19 — average  due  date,  Jan.  12. 

38,100  @  7%  for  one  day=$7-3i,  interest  due  Feb.  19.    Total  due  Feb. 

19— $1007.31.  

CHAPTER  III.  • 
The  Conto  Currento  Method  of  Computing  Interest  on  Accounts  Current. 

The  method  illustrated  below  is  still  largely  used  by  European  banking 
and  commission  houses  in  figuring  the  interest  of  accounts  current  rendered 
at  certain  intervals. 

Date  of  statement  April  15,  '96.    Int.  rate  6%: 

18S6.  Time.  Due.  Days.  Numbers.  Debits. 

Jan.  17  6od.     Mar  17     29  '  800  $2,758.63 

Feb.  4 Feb.  4     71  355  500.00 

Mar.  1  6od.     May  1      16  292  1,823.59 

Mar.  15 Mar.  15     31  244  786.26 

Mar.  31  Mar.  31      15  48  319-80 

April  2 6od.             June     2            48  89  186.39 

Debit  numbers  from  Cr.  side 455 

Balance   of   numbers    1,402 


3,304  $6,374.67 


Jan.       i   Dec.      31             106                  598  $    503.75 

Jan.      15    Jan.        31                75                1,875  2,500.00 

Feb.    15    Mar.        1               45                  45°  1,000.00 

Mar.    14    April      15  1,000.00 

Mar.   14    May       15               30                   150  500.00 

Mar.   14    June       16               61                   305  500.00 

Credit   numbers   from    Dr.   side 381 

6%  on  balance  of  numbers  (1402)-  •  2^-37 

Balance  carried  forward   287.55 

3,304  $6,374.67 

EXPLANATION. 

Multiply  the  principal  (debit  or  credit)  by  number  of  days,  point  off 
last  four  figures  at  right  and  enter  number  left  in  "Number"  column.  Thus 
2758.63X29=800.0027.     Number  to  be  entered— 800. 

On  coming  to  items  3  and  6  on  the  debit  side  we  find  the  date  of  matur- 
ity to  be  May  1,  sixteen  days  after  date  of  equation.  The  numbers  for  these 
items  should  therefore  be  written  in  red  ink,  not  included  in  the  footing  of 
the  column,  but  transferred  to  the  credit  side,  as  shown  in  illustration. 

Similarly  on  the  credit  side  we  enter  the  5th  and  6th  items  in  red  ink 
and  transfer  them  to  the  debit  side. 

Enter  the  balance  of  the  "Numbers"  column  on  the  side  to  which  it  may 
belong,  and  compute  interest  due  by  dividing  it  (the  balance)  by  60,  point- 
ing off  the  second  and  third  figures  of  the  quotient  to  the  right  to  get  dollars 
and  cents,  as  follows : 

Balance  of  numbers  (Cr)  i402^6o=$23.37. 


CHAPTER  IV. 
A  Symposium  From  The  Book-Keeper. 

November,  1896. 

I  have  been  trying  to  discover  why  I  cannot  find  the  average  due  date 
of  the  following  statement  of  account : 

1895.  DR.  Terms.  1895  CK. 

Jan.      i $247-34  30  days  Feb-  5 $100.00 

Feb.   10 225.50  10  days  March  8 100.00 

March   5 243.20  60  days  April    15 200.00 

April    20 178.20  30  days  Dec.  31 200.00 

$600.00 
Balance  due  Jan.  1,  1896 294.24 


$894.24  $894-24 

I  don't  want  the  amount  of  interest  due.    I  want  the  average  due  date. 

U.  P.  B. 

***** 

January,  1897. 

To  pass  muster,  it  seems  to  me  that  an  answer  to  the  problem  in  "Aver- 
aging Accounts,"  published  in  your  November  number,  should  be  one  more 
of  language  than  of  figures.  Thus,  in  figures  I  answer:  the  account  in  ques- 
tion averages  due  September  20th  of  the  preceding  year.  Then  you  would 
ask:  "How  can  the  account  be  due  at  a  time  preceding  the  date  of  any 
single  item?" 

8 


So,  to  answer  in  a  way  that  shall  both  solve  and  explain  the  solution,  I 
submit: 

The  balance,  $294.24  averages  due  Sept.  20,  preceding  year. 

The  credits,  $600.00,  average  due  June  22,  current  year. 

The  balance,  $294.24,  average  due  Sept.  20,  preceding  year. 

And  this  average  date  is  taken  as  a  basic  date  in  bringing  down  a  bal- 
ance; that,  at  any  time  this  balance  may  from  that  new  basic  date  produce 
the  same  interest  as  if  the  account  had  been  duly  charged  with  interest  on 
the  past  due  debits,  and  credited  with  interest  on  the  payments  and  unex- 
pired time  of  non-due  debits. 

The  common  expression,  "Average  due  date  of  an  account,"  will,  in 
the  special  example  given,  lead  the  novice  to  wonder  how  the  balance  could 
be  due  before  any  of  the  items  even  date ;  but,  if  he  will  reflect  that  the  ex- 
pression is  the  proper  one  for  the  date  (never  mind  the  word  "due")  of  an 
average  account,  in  an  abstract,  mathematical  sense,  just  as  he  knows  that 
two  subtracted  from  one  does  leave  something,  viz. :  minus  one,  so  he  will 
better  understand  that  it  does  not  mean  due  in  the  sense  of  a  certain  bill, 
but  the  theoretical  time  the  net  balance  of  an  account  must  have  run  to 
produce  at  any  time  the  correct  amount  of  interest. 

This  is  the  precise  method  used  in  finding  the  average  date  of  balance 
of  account.    Thus : 

1.  Calculate  interest  to  any  assumed  date  after  due  date  of  latest  item 
on  each  debit  from  its  due  date. 

2.  Ditto,  for  each  credit. 

3.  Substract  the  total  interest  credits  from  the  total  interest  debits ; 
the  remainder  is,  of  course,  the  interest  due  on  the  account  as  a  whole,  to 
the  assumed  date. 

4.  Assuming  the  balance  of  the  account  as  a  principal  (average  date 
of  account,  meaning  average  date  of  balance  of  account)  we  know  from  (3) 
the  interest  due,  and  thus  find  the  theoretical  date  for  this  new  principal, 
which  becomes  a  basic  date  for  subsequent  calculations,  without  the  neces- 
sity of  again  going  over  the  old  account  in  detail.  For  want  of  a  better 
name,  this  is  called  the  "average  due  date  of  the  account." 

E.  R.  B.,  Chicago. 

3jc        s(c        ^c        a|e        sfc 

April,  1897. 

I  have  read  the  question  of  "U.  P.  B.,"  in  your  November  issue,  which 
was  answered  by  "E.  R.  B."  in  a  subsequent  edition  in  so  able  a  manner 
that  I  do  not  believe  it  necessary  to  indulge  in  any  further  comment. 

The  system  of  averaging  accounts,  which  I  render  below,  is  in  nowise 

original,  but  appreciating  its  simplicity  it  is  submitted  for  the  benefit  of 

those  who  believe  "averaging  accounts"  an  obstacle  difficult  to  overcome. 

Jan.  3,  30  days  $130  Jan.  4,  $250 

Jan.  4,  60  days  258  Jan.  7,  180 

Feb.  9,  10  days  159  Jan.  12  100 

OPERATION. 

Find  the  date  when  bills  are  due,  setting  opposite  each  respective  sum, 
also  credits,  thus : 

Feb.     2,  $130  Jan.     4,  $250 

Feb.     3,  258  Jan.     7,  180 

Feb.    19,  159  Jan.    12,  100 


Now,  take  the  first  date  as  a  basis,  same  being  indicated  by  a  line  drawn 
around  it,  and  find  the  number  of  days  between  each  item  and  the  basis, 
then  multiply  the  item  with  the  number  of  days  thus  found : 

Feb.     2,     $130X28  days $  3.640 

Feb.     3,       258X29  days 7482 

Feb.  19,       159X45  days 7.155 

$18,277 

$547 
Jan.    4,     $150 

Jan.     7,       180X3  days 54° 

Jan.    12,       100X8  days 800 

$430  $i>340 

Find  the  sum  totals  of  all  bills,  payments  and  gross  amounts  as  above. 
Subtract  the  sum  totals  of  the  credit  side  from  the  debit  side  and  divide ; 
the  quotient  will  represent  the  amount  of  days  from  Jan.  4,  at  which  time 
the  balance  of  the  account  would  be  due,  or  May  29. 

547  18,277 

430  I.340 

117     -f-     16,937     =145  days  from  Jan.  4. 

L.  B.,  New  York. 
*     *     *     *     * 

June,  1897. 

I  desire  to  offer  a  solution  of  the  problem  presented  by  "U.  P.  B.,"  as 
follows : 

In  averaging  accounts  it  is  proper  to  consider  and  include  only  such 
credit  items  with  dates  falling  within  the  radius  of  the  original  terms,  and 
to  discard  those  which  come  in  irregularly  and  thereby  lose  all  connection 
with  the  original  transaction.  In  a  compound  average  this  rule  is  of  par- 
ticular importance,  as  will  be  shown  in  solution  No.  2 ;  therefore  credit 
item  of  $200,  dated  Dec.  31,  1895,  is  left  out  of  solution  No.  1. 

Solution  No.  1 — Basis,  January  1,  1895. 

Jan.     1 $247-34  30  Feb.      1 3i@io%=$  2.13 

Feb.  10 225.50  10  Feb.  20 5i@io%         3-l9 

March     5 243.20  60  May     4 i24@io%         8.38 

April   20 178.20  30  May  20 140(0)10%         6.93 


Total $894.24  $20.63 

Time  counted  forward. 

Cr.  Days  Int. 

Feb.    5 $100  36@io%=$i.oo 

March  8 100  6y@io%       1.86 

April  15 200  105(0)10%      5.83 

Total $400  $8.69 

Debits  $20.63 
Credits      8.69 


ToBal.  Debit  Int  $11.94 


10 


Balance  of  account  is  $494.24,  and  will  have  to  run  87  clays  from  Jan.  1, 
1895,  forward,  to  earn  balance  of  interest,  which  is  March  28,  the  average 
date  of  equation.  Now,  from  March  28,  1895,  to  Jan.  1,  1896,  is  278  days, 
and  $494.24  at  10  per  cent  equals  $38.16  interest,  and  the  account  will  stand 
as  follows : 

Jan.  1,  1896,  balance  of  account $294.24 

Interest   on   $494.24   equals $38.16 

Less  int.  for  I  day  on  $200,  paid  Dec.  31,  1895 06  38. 10 


Balance  due  Jan.  1,  '96 $332.34 

Solution  No.  2 — Basis,  January  1,  1896. 

Jan.     1   $247-34  30  Feb.     1  344  $22.95 

Feb.  10 225.50  10  Feb.  20  314  19.67 

March  5 243.20  60  May    4  241  16.28 

April  20 178.20  30  May  20  224  1 1.09 


Total $894.24  $69.99 

Time  counted  backward. 

1895. 

Feb.      5 $100  to  Jan. 

March  8   100  to  Jan. 

April    15    200  to  Jan. 

Dec.  31    200  to  Jan. 

Total $600  $31. 

Debits $  69.99 

Credits 31-89 


I, 

'96  329®  10% = 

=$  914 

I, 

'96  298®  10% 

8.25 

I, 

'96  260(g)  10% 

14.44 

I, 

'96        l@lO% 

.06 

Bal.  debit  interest $  38.10 

Bal.  account  Jan.  1,  '96     294.24 


Total,  as  stated  above.  . . .  $332.34 

Solution  No.  2  shows  that  it  is  only  additional  labor  to  find  average 
date  of  equation  of  an  account  after  it  lapses  into  innocuous  desuetude 
without  deriving  any  benefit  from  the  effort.  C.  G.,  St.  Louis. 

June,  1897. 

A  number  of  rules  for  averaging  accounts  have  appeared  in  The  Book- 
Keeper,  but  some  of  them,  I  think,  are  too  much  encumbered  with  figures. 
The  method  below  illustrated  has  been  adopted  in  our  office,  where  the 
book-keeper  is  often  asked  for  the  equated  time  of  the  balance  of  an  ac- 
count at  a  moment's  notice. 


1897. 

Jan.     5, 

60 

$350 

Jan.     8, 

90 

$240 

Jan.  30 

60 

200 

Jan.  23, 

90 

150 

Feb.   7, 

cash 

140 

Feb.  10, 

cash 

100 

Mar.  10, 

60 

no 

April  5, 

30 

290 

The  book-keeper  draws  the  account  off  on  a  statement  blank,  filling  in 
as  he  goes  the  due  date  of  each  item,  using  30  days  as  a  month.  For  con- 
venience in  reckoning  he  uses  the  first  day  of  some  month  for  his  basis.    In 

11 


this  case  he  takes  Jan.  I,  '97,  and  computes  interest  on  each  item,  using  the 
36  per  cent  one  thousand  day  method.  This  method  is  deduced  from  the 
lact  that  any  amount  at  interest  for  one  thousand  days  at  36  per  cent  equals 
the  principle,  so  that  moving  the  decimal  point  to  the  left  one,  two  and 
three  places,  gives  interest  for  100  days,  10  days,  and  1  day,  respectively. 
Thus : 

Interest  on  $350  for  65  days. 

Interest  for   10  days $  3.50 

Interest   for   50  days J7-50 

Interest   for     5   days 1.75 


Interest  for  65  days 22.75 

After  calculating  the  interest  on  the  various  amounts  shown  on  the 
original  account  the  book-keeper  proceeds  to  arrange  the  following  state- 
ment, which  shows  the  balance  of  account  and  balance  of  interest. 

Statement — Focal  Date,  Jan 

Jan.  5    March  5 

Jan.  30  March  30 

Feb-  7 Feb.  7 

March  10 May  10 

April  5   May  5 


r.  1, 

1897. 

65 

$35o 

$22.75 

90 

200 

18.00 

37 

140 

5.18 

130 

no 

14.30 

125 

290 

36.25 

$1,090 

$96.48 

98 

$240 

$23.52 

113 

150 

16.95 

40 

100 

4.00 

$490 

$44.47 

CREDITS. 
1897. 

Jan.  8 April  8 

Jan.  23 April  23 

Feb.  10 Feb.  10 


Balance $600       $52.01 

.60-^52.00=87. 
87  days  from  Jan.  1  is  March  28;  due  date  March  28,  '97. 

W.  F.  A.,  Oklahoma  City,  L  T. 
***** 
July,  1897. 

The  subject  of  averaging  accounts  has  frequently  been  presented  of 
late  in  The  Book-Keeper,  but  being  under  discussion  in  the  local  society 
to  which  the  writer  belongs  it  was  suggested  that  the  paper  he  read  might 
present  a  useful  illustration  to  your  readers  generally. 

The  figuring  should  be  direct  to  the  purpose,  which  is,  a  statement,  or 
settlement. 

For  statement  June  1,  1897,  subject  to  6%  int.  after  maturity. 

1887. 

Jan.  22 30  days  net 

Jan.  29 60  days  net 

Feb.  12 60  days  net 

March  4 30  days  net 


Dr. 

1897. 

Cr. 

$   I33.84 

March  21. 

$  500.00 

24O.I4 

April  13 

400.00 

530-25 

Balance 

223.43 

219.20 

$1,123.43  $1,123.43 

12 


The  first  question  is,  will  we  gain  in  this  instance  by  averaging  direct 
to  June  i,  the  date  for  our  statement ;  or  by  averaging  first  to  April  13,  the 
latest  date  in  the  account,  and  figuring  interest  from  there  on?  I  will  say 
the  latter,  as  we  thereby  keep  our  time  figures  smaller  by  47  in  each  case. 
We  now  restate  the  account  as  follows : 

DEBITS. 

<on„  ,,   .        ,_.   .  Amount  Days  to  Product 

1897  Matured  Date.  Invoice  April  13  for  Average 

Feb.  21  $i33-84  5i  $6,825.84 

March  30 140.14  14  3>36i-96 

April  13  530-25 

April  3   219.20  10  2,192.00 

$1,123.43         75  $12,379.80 


CREDITS. 


1897. 

March  21   $    500.00         23  $11,500.00 

April  13   400.00 

$    900.00         23  $11,500.00 

Total  Debits  $1,123.43         75  $12,379.80 

Total  Credits 900.00         23  11,500.00 

$    223.43         52  $      879.80 

$223.43  into  $879.80=3.9+  or,  say  4  days. 

This  means  that  balance  of  account  would  have  four  days  to  run  to 
April  13,  or  in  other  words,  that  the  average  date  of  balance  of  account 
would  be  April  9.    We  therefore,  make  statement  June  1,  1897,  as  follows: 

Balance   of   account $223.43 

Interest  on  balance  from  April  9,  average  date,  or  52  days  at  6  per 

cent    i-94 

$225.37 

To  prove  the  above,  divide  52,  the  balance  of  day  totals,  into  $879.80, 
thus  obtaining  $16-92,  the  average  amount,  which  at  interest  for  52  days 
will  equal  $223.43  for  four  days.  W.  C.  P.,  Chicago. 


September,  1897. 

In  the  June  number  of  The  Book-Keeper,  "W.  F.  A."  says  the  best 
system  is  that  which  requires  the  fewest  figures  and  the  least  mental  work. 
The  way  I  shall  now  illustrate  will  be  to  take  the  first  date  as  "W.  F.  A." 
does,  simply  to  illustrate  that  if  you  take  the  same  date,  figuring  at  1  per 
cent  per  month  is  easier  than  36  per  cent  per  year. 

13 


Statement,  Focal  Date  Jan.  ist,  1897. 

DEBITS. 

Due.  Days.  Am't.  Int. 

Jan.  5 March  5     65  $  35°  $  7-58 

Jan.  30 March  30    90  200  6.00 

Feb.  7 Feb.  7         37  140  1.72 

March  10 May  10      130  no  476 

April  5 May  5        125  290  12.08 

$1,090       $32.14 

CREDITS. 

Jan.  8  April  8        98       $240      $7-84 

Jan.  23   April  23     113  150  5.65 

Feb.    10    Feb.  10       40  100  1.34 

$  490      $14.83 
Total    $  600       $17.31 

We  now  divide  the  $600  by  30,  and  get  20.  We  divide  the  17.31  by  this 
20  and  get  86>4,  which  we  call  87.  Counting  forward  from  Jan.  1  gives  us 
March  28  as  the  date  when  the  $600  is  due.  In  dividing  the  balance  of  dol- 
lars due  it  is  best  to  cut  off  the  cents  and  the  units  of  dollars  and  divide  by 
3.  The  above  interest  is  12  per  cent  a  year,  or  1  per  cent  for  every  30  days. 
By  removing  decimal  points  two  places  to  the  left  in  the  principle  we  have 
the  interest  for  30  days,  and  removing  it  three  places  we  have  it  for  three 
days.  Take  the  first  amount  of  $350  for  65  days.  Sixty  days  is  $7,  three 
days  35  cents,  and  two  days  one-third  less,  or  23  cents. 

S.  H.  T.,  San  Francisco. 


II 


PART  III. 


Manufacturers'  Accounts. 


Factory    Cost    Accounting, 


CHAPTER  I. 
General. 


THE  growing  appreciation  of  the  value  of  correct  accounting  methods 
in  business  is  responsible  for  the  demand  throughout  the  United 
States  for  a  standard  method  of  treating  factory  costs.  There  are 
different  conditions  to  be  provided  for  in  every  business,  but,  nevertheless, 
certain  fundamental  principles  can  be  laid  down  for  the  guidance  of  book- 
keepers which  will  be  of  assistance  and  value  in  almost  every  conceivable 
case,  and  this  is  the  principal  object  of  this  article.  It  is  not  presented  to 
its  readers  as  a  complete  encyclopedia  on  the  subject  of  factory  costs,  but 
more  as  a  work  preliminary  to  one  we  hope  shortly  to  publish  on  more  com- 
prehensive lines.  Neither  is  it  our  intention  to  generalize  extensively  on  the 
theory  on  which  such  accounts,  or  system  of  accounting,  should  be  estab- 
lished. We  will  endeavor  to  make  our  information  as  plain  and  concise  as 
.  possible,  and  to  give  as  much  as  we  can  within  the  limits  of  an  article  of 

these  dimensions. 

*     *     * 

In  these  days  of  keen  competition  it  may  safely  be  said  that  in  a  manu- 
facturing business  of  any  kind  it  is  absolutely  necessary  to  keep  an  accurate 
account  of  the  actual  cost  of  the  article  manufactured,  and  to  establish  such 
a  system  of  estimating  costs  that  contracts  shall  not  be  taken  at  a  loss,  and 
that  goods  shall  not  be  ignorantly  sold  at  a  loss. 

Numberless  failures  can  be  traced  to  an  inefficient  system  of  estimating 
or  recording  manufacturing  costs,  the  merchant  being  unable  to  discover 
where  he  was  losing  money,  and  consequently  being  unable  to  apply  the 
required  remedy. 

The  merchant  should  be  in  a  position  to  ascertain  at  any  time  the  actual 
cost  of  production  of  any  article  manufactured,  and  to  check  the  cost  of 
production  of  such  articles  by  a  comparison  with  previous  costs.  It  should 
also  be  possible  for  him  to  receive  a  report  at  any  time  required  of  the  raw 
material,  articles  in  process  of  manufacture,  and  manufactured  articles  on 
hand,  without  the  tedious  process  of  taking  inventory,  and  the  method  of 
arriving  at  this  estimated  inventory  should  be  so  perfect  that  it  will  agree 
with  the  actual  inventory  whenever  the  latter  may  be  taken  for  purposes 
of  verification. 

Some  authorities  consider  that  into  this  question  of  cost  of  production 
should  also  enter  storage  of  manufactured  goods,  rent  of  factory,  erection 
of  plant,  manufacture  and  depreciation  of  machinery  and  tools,  and  similar 
expenditures. 

3 


We  believe,  however,  that  it  is  best  to  include  only  those  expenditures 
which  vary  in  proportion  to  the  volume  of  production,  afterwards  pro-rating 
capital  expenditures  in  fixing  the  prices  at  which  the  manufactured  articles 
are  to  be  offered  for  sale. 

Generally  speaking,  therefore,  our  cost  records  must  provide  for: 

Purchase  of  raw  material. 

Returns  and  allowances  claimed  on  account  of  imperfections,  etc. 

Labor. 

Other  factory  expenditures. 

Manufactured  stock. 

In  a  factory  of  any  size  the  best  plan  is  to  arrange  for  a  separate  set 
of  books  to  be  kept  there,  the  main  office  simply  charging  the  factory  with 
cash  paid  out,  and  crediting  it  with  expenditures  accounted  for.  Thus,  the 
main  office  will  debit  factory  account  with  currency  for  wages  or  expenses, 
or  checks  in  payment  of  raw  material,  and  credit  factory  account  with  its 
report  of  "Wages  paid,  $ — ,"  "General  expense,  $ — ,"  "Accounts  payable, 
$ — ."  The  trial  balances  of  the  factory  and  main  set  of  books  will  be  as- 
sembled for  the  purpose  of  compiling  balance  sheets,  etc. 

If  the  factory  is  small  the  factory  accounts  can  be  carried  in  the  main 
office  books,  but  it  is  not  such  a  convenient  arrangement. 

In  the  first  place,  we  will  predicate  an  example  where  only  one  kind 
of  raw  material  is  used  and  only  one  class  of  articles  manufactured.  In 
this  case  we  will  require  a  factory  journal  which  may  be  ruled  as  shown 
in  form  A. 


Do 

Fopm   A 

F&tzfora 

y      Oc-nar°a/     cJo(-jn>r\£>l 

CQ- 

rVlaicv 

on,tc 

Mi.H 

Gencrol 
ELxpxrnsc 

Labor" 

Row 

Aoc'rife 

Pfcyable 

5und«a 

Elio 

Narrescff 

t;,k 

SundVa 

Accnta. 
Rsvoble 

M,\t<-r'i.-J 

Ubc 

MfdSfocKlorf.ee 
|fo»5tor»=} 

J 

When  the  raw  material  is  received  it  will  be  debited  to  raw  material 
account  in  the  column  provided  for  the  purpose  and  credited  to  the  concern 
from  whom  received  in  the  purchase  account  column.  From  the  periodical 
reports  received  from  foremen  or  workmen,  labor  will  be  charged  with  the 
time  expended  on  manufacture,  and  manufactured  stock  charged  with  the 
material  used,  "raw  material  account"  being  credited.  Labor  and  expense 
will  also  be  closed  into  manufactured  stock  account  in  order  to  ascertain 
total  cost  of  goods  manufactured.  When  manufactured  stock  is  delivered 
to  the  store  (T.  H.  &  Co.)  the  store  is  debited  and  manufactured  stock 
account  is  credited.  When  a  balance  sheet  is  prepared  a  report  is  required 
from  the  factory  of  all  unfinished  manufactured  stock  on  hand  and  the  labor 
so  far  expended  on  same,  and  the  total  incorporated  as  an  asset. 

The  general  expense  of  the  factory,  such  as  manager's  and  office  sal- 
aries, coal,  horse  feed,  engineer's  wages,  etc.,  etc.,  should  be  charged  to  a 
separate  account,  and  pro-rated  where  there  are  different  kinds  of  products. 

The  raw  material  account  will  thus  show  the  amount  of  raw  material 
which  should  be  on  band;  manufactured  stock  account  will  show  amount 
of  manufactured  stock  not  delivered  to  store;  unfinished  manufactured  stock 
account  will  show  amount  of  raw  material  and  partly  manufactured  stock 


in  factory  in  the  hands  of  workmen,  and  cost  of  labor  so  far  expended  on 
same.  The  appended  diagram  may  be  found  useful  in  assisting  to  a  thorough 
comprehension  of  the  plan. 

The  factory  reports  of  material  used  and  time  occupied  are  generally 
made  on  blanks  specially  devised  for  the  particular  business  for  which  they 
are  required.  They  specify  quantity  of  material  received  and  used  and 
hours  spent  on  the  job.     Such  reports  are  sometimes  turned  in  to  the  office 


daily,  sometimes  weekly,  sometimes  as  a  job  is  finished. 

A  book  of  record  is  kept  of  raw  material  received  and  issued,  and  the 
statistics  in  this  book  can  be  checked  by  the  factory  report  blanks  and  by 
taking  inventory.  In  the  latter  case  the  stock  on  hand  should  agree  with 
the  balance  shown  by  the  record  of  material  received  and  issued. 

The  above  are  the  fundamental  principles  on  which  all  factory  costs  are 
ascertained,  but  the  application  of  these  principles  is  carried  out  in  an  infinite 
variety  of  ways  in  accordance  with  the  conditions  to  be  satisfied.  There 
may  be  twenty  different  kinds  of  raw  material,  a  separate  account  of  each 
of  which  must  be  kept,  and  also  of  the  labor  on  each  kind  of  material. 

There  may  be  all  kinds  of  extraneous  operations,  the  cost  of  which  must 
be  carefully  recorded,  as  in  the  case  of  a  coal  mining  company,  or  a  manu- 
facturer of  electric  motors  and  appliances.  These  present  an  opportunity 
to  the  accountant  for  the  exercise  of  his  skill  in  adapting  his  various 
forms  to  the  special  requirements  of  the  case. 

One  of  the  most  important  features  in  the  system  of  factory  accounting 
is  the  pay  roll.  A  great  deal  of  time  is  usually  spent  in  perfecting  an 
efficient  system  of  recording  and  paying  wages,  and  a  great  deal  of  time 
is  invariably  wasted  wdiere  efficiency  has  not  been  obtained.  Such  a 
system  should  afford  a  guarantee  against  stuffing  the  rolls,  or  charging 
up  unearned  wages.  Tt  should  also  furnish  a  simple  method  for  accur- 
ately obtaining  statistics  of  costs  of  articles  manufactured. 

The  actual  number  of  hours  and  minutes  should  be  recorded,  as  the 
workmen  enter  or  leave  the  premises,  by  one  of  the  modern  "Time  Re- 
corder" machines.  Where  possible  it  is  best  to  use  one  on  which  the  writing 
of  the  signature  makes  the  required  record,  as  this  prevents  one  man  from 
registering  both  for  himself  and  a  friend  who  may  be  late  or  absent  alto- 
gether. 

Each  workman  should  be  furnished  with  a  blank  ruled  to  suit  the 
peculiarities  of  the  business,  on  which  will  be  entered  the  description  of  the 
job,  or  contract,  and  on  which  the  workman  will  record  time  occupied  and 
amount  of  individual  production. 


The  forms  we  now  present  are  not  expected  to  be  suitable  tor  every 
business,  but  are  intended  to  illustrate  the  fundamental  principles  on  which 
an  efficient  cost  system  should  be  based. 

y.  i  is  a  Stock  Record,  showing  disposition  of  material  received  and 
quantity  on  hand.  This  record  should  be  partially  or  completely  verified 
at  certain  intervals  in  order  to  show  that  the  goods  called  for  are  actually 

and. 


STOCK 

Boon  -  ric  i 

Nl.£5nn,c     of~A//<afer 

r"a 

1 

Dafe 

rb^r^ 

D«r^.C  r>c  ptTor\_ 

Q^rvtrfj, 

A^oortf 

Dife 

Qu<L/St7tV 

Arrvourvl" 

©«al&nce 

Fig.  2  shows  the  order  on  the  stockkeeper  for  material  to  be  used  in 
manufacture  of  product.  These  orders  constitute  the  storekeepers'  vouch- 
ers for  material  delivered,  and  the  quantities  are  posted  therefrom  to  the 
Stock  Book. 


-r«e  AMERICAN    MANUrACTURlNQ  CO 

<pia  2'  -5TC>C>\   ORDER   No       

To  ^tbPcKcepep' 

Deliver  to  becswrp1t\c  fbllowir\a  or\  Shop  order  No 


^ipt. 


Each  workman  is  furnished  with  a  cost  card  (Fig.  3),  on  which  he 
records  particulars  of  time  consumed  and  material  used  on*  the  contract, 
or  job,  on  which  he  is  engaged.     When  the  job  is  completed  this  card  is 


(cost  cadd  no^) 

Narr\e  oferryploye. 

Tl-IE 

AMERICAN    MANUFACTURING  CQ, 

Mo 

Shop 

0-=>d<=P 

o«_.t- 

~T7me 

Date 
fTr\isKecl 

Ouantily 

Dcpt 

used 

Ppime 

CjOST- 

II 
Labors  Sundries 

"fetal 

Cost 

/ 

turned  in  to  the  cost  clerk,  who  figures  out  on  it  the  cost  of  material,  labor 
and  sundries  and  enters  it  on  the  Cost  Record  of  Summary  (Fig.  4).  A 
separate  page  is  allotted  to  each  contract  or  job,  and  the  total  cost  of  same 
ascertained.       This  amount  is  then  posted  to  the  contract  account  in  the 

.  which  is  credited  with  contract  price,  the  difference  being  the 
amount  of  either  loss  or  gain.     V  in    staple   articles   are   manufac- 

i  comparative  statement  of  cost  of  manufacture  should  be  main- 
tained, in  order  to  ascertain  that  such  costs  are  not  excessive  or  excep- 
tional in  any  way. 


6 


FIG 

A 

aosT~ 

5UMMADY 

Dctfe 

Coat 
Ca>n>d  No 

Name   of 
Wof^Krr\arv- 

Dep+ 

Qu^Ktny 

Cos-t 

Labop 

Sundries  folio 

Co^|| 

In  Figure  5  we  show  a  form  of  Pay  Roll  Book,  the  particulars  of 
which  are  obtained  from  the  Time  Recorder.  If  the  Pay  Roll  Book  is  com- 
pared with  the  workmen's  cost  cards  a  very  good  check  is  obtained  on  the 
total  time  reported. 

Some  establishments  still  have  their  employes  sign  the  pay-roll,  but 
where  the  hands  are  very  numerous  this  is  found  laborious  and  inconven- 
ient, besides  exposing  to  the  view  of  the  person  signing  the  amounts  paid 
to  others. 


FIG.  -o" 

PAY 

DOLL- 

BO( 

D/f 



Nar^e 

•VI 

T 

W 

Th 

r 

5 

lb1h\ 
TTrrys 

,Rste 

Amount 

Adv<ar\o=d 

Eto  lance 
duo 

WKer> 

Raid 

i 

' 

2 

--■ 

=*, 

.1 

A 

■3 

Fig.  6  shows  a  very  good  form  of  combined  wages  card  and  voucher, 
which  can  be  used  with  advantage. 


(f-io.e}  w* 

Ti-ieAMERlCAN   MANUrACTURING  CO. 


Cas>i-iiep*: 

I90O 

c»r. : 

ir\  payment  0? 

H£^ca  du»«aa  follow*: 

Morsday   . . .  . 

TKunsdcy"  . 
fV.day       .  .  . 

laal....!!* 


.£>upf. 

Received  of  Tke  Arr\<£i»icar>M&r\u(actai»inft  Co.  1tSs  Above 
omooriJ--,ofJlofollcl£>.m&1K;» -dcyoT _.ISOO 


Oiciridtarse)  . 


All  goods  manufactured  will  be  made  in  accordance  with  instructions 
given  the  foreman  of  the  department,  or  the  superintendent  of  the  factory. 
•On  completion  of  the  goods  the  shop  order  will  be  returned  to  the  office, 
and  the  goods  delivered  and  billed.  We  append  an  illustration  of  shop 
order  referred  to  above  (Fig.  7).  When  completed  it  is  usual  to  transfer 
the  goods  from  factory  to  store,  the  factory  charging  store,  with  cost,  and 


the   store   crediting   factory   and   debiting   manufactured   stock.     The   rela- 


Notice  . DvsondeP  1b be  pglOrned  to cff.ee.  ateunped  wilr. dale cf  completTors 
5MOO    OQDEQ  IFio    7) 

No OrdeoDooKNo       "... 

To  r&nerrsar*  (on  5udcpi  r^fervdtrtf) 


"The  American  M^.nufecT(-ii»inei  Co. 

tionship  between  the  store  and  factory  accounts  may  be  conveniently  illus- 
trated here: 

FACTORY   BOOKS. 

Debit —  Credit — 

Raw  material.  Accounts  payable. 

Labor   (paid).  Store. 

Sundries   (paid).  Store. 

Accounts   payable  (paid).  Store. 

Store.  Manufactured  stock   (delivered). 

STORE   BOOKS. 

Debit —  Credit — 

Labor.  Cash. 

Factory  sundries.  Factory. 

Accounts  payable.  Sales  account. 

Manufactured  stock. 
Customers. 

In  a  great  many  establishments  it  is  usual  to  add  a  certain  percentage 
'.o  manufacturing  cost  to  cover  factory  general  expense,  maintenance,  de- 
preciation, etc.,  so  that  on  the  store  books  the  factory  account  will  show 
even. 

If  a  customer  orders  a  suite  of  furniture  separate  shop  orders  should 
be  made  for  each  article  as  the  separate  cost  of  each  is  required  to  be  tabu- 
lated. 

Fig.  3  can  be  used  for  piece  work  if  such  a  system  of  labor  is  employed, 
but  a  special  form  of  pay  roll  would  be  necessary  to  take  care  of  the  amount 
of  piece  work  done  instead  of  the  number  of  days  or  hours  employed. 

The  invoices  of  material  received  will  be  O.  K.'d  by  the  stock-keeper 
to  vouch  for  goods  duly  received,  by  the  purchasing  agent  to  vouch  for 
correct  price,  and  by  the  book-keepe"  to  show  that  amount  is  correct. 

All  expenditures  other  than  those  incidental  to  the  process  of  manu- 
facture will  be  separately  classified  and  recorded. 


CHAPTER  IT. 
Furniture   Business. 

In  the  many  articles  and  discussions  published  in  rgeard  to  "Cost 
Accounting"  very  little  attention  is  paid  to  the  manufacture  of  "stock" 
articles,  i.  e.,  goods  not  made  to  order  but  in  certain  standard  sizes 
and  qualities. 

As  an  example  we  will  take  a  furniture  manufacturer  who  makes  chairs, 
tables,  couches,  ornamental  stands,  etc.  It  is  not  necessary  in  such  a  case 
to  install  a  complex  system  of  time  records,  as  a  certain  standard  of  ma- 
terial used  and  time  occupied  can  be  established.  One  chair  of  a  certain 
kind  and  style  should  cost  exactly  as  much  as  another  chair  of  the  same 
kind  and  style.  The  first  thing  the  manufacturer  should  do,  therefore,  is  to 
fix  the  standards,  and  then  hold  the  foreman,  or  superintendent,  respon- 
sible for  maintaining  the  standard. 

The  accounting  department  has  now  to  provide  a  check  on  the  cost 
of  production  which  is  accomplished  by  means  of  a  cost  ledger.  In  this 
ledger  open  an  account  with  each  line  of  goods  manufactured. 

In  the  general  ledger  open  two  accounts — a  raw  material  account  and 
a  manufacturing  account.  All  bills  of  raw  material  are  debited  as  they  come 
in  to  raw  material  account. 

Each  shop  order,  on  completion,  will  show  amount  of  raw  material  used 
and  time  consumed.  Debit  cost  to  account  in  cost  ledger  and  record  com- 
parison with  standard,  thus : 

No.  5  Upholstered  Chairs.     Standard  $3.15. 

S.    O.     5719     Material    $1642 

Labor    1625     3 .  267 

No.  5  upholstered  chairs  account  will  always  show  whether  orders  are 
above  or  below  standard,  and  as  a  separate  "key"  will  be  kept  to  the  stan- 
dards, showing  proportion  on  which  established,  the  cause  of  any  disparity 
can  be  instantly  ascertained. 

At  the  end  of  the  month  the  closing  entries  will  be  on  the  following 
order : 

Debits.  .  .  Credits. 

Raw  Material .  .$5,500  00 

$5,500  00     Manufacturing  Account. 

For  material  used  as  per  shop  orders  Nos.  —  to  — 

Wages $9,250  00 

9,250  00     Manufacturing  Account. 

For  time  reported  on  shop  orders  Nos.  —  to  — . 

These  entries  will  correspond  with  the  cost  accounts  in  the  cost  ledger. 
The  balance  of  raw  material  and  wages  accounts  will  represent  assets ;  ma- 
terial on  hand  and  used  on  uncompleted  shop  orders  ;  time  employed  on  un- 
completed shop  orders. 


CHAPTER   III. 
Tool    Manufacturing. 


Stock  received  from  suppliers  is  purchased  by  means  of  triplicate 
orders,  and  if  necessary  a  special  Stock  Purchase  Order  is  also  issued.  For 
a  full  description  of  similar  forms  used  for  stores,  see  September  Book- 
Keeper. 

Quotations  received  are  kept  on  record  by  means  of  a  card  index,  on 
the  same  lines  as  the  Store  Quotations.  Stock  ordered  is  also  indexed 
exactly  as  Stores  on  Order.  In  a  small  concern  all  quotations  received, 
whether  for  stores  or  stock,  might  be  kept  in  the  same  index,  and  Stores 
on  Order  and  Stock  on  Order  (from  suppliers)  in  another  index.  If  this 
plan  is  followed  it  will  be  found  well  to  use  a  different  colored  card  for 
stores  and  stock. 

The  stock-keeper  being  responsible  for  keeping  on  hand  a  proper 
quantity  of  the  various  lines  required,  requisition  upon  the  manager  for 
anything  he  may  want  manufactured  by  the  shops  for  stock.  It  will  be 
seen  that  Requisitions  for  Stock  (Form  200)  have  a  liberal  space  for 
remarks.  This  is  in  order  that  the  Stock-keeper  when  calling  for  manu- 
factured stock  may  give  the  management  the  benefit  of  any  knowledge 
he  may  have  as  to  the  best  or  probable  future  demand  for  the  goods  for 
which  he  is  asking,  and  may  put  on  record  any  suggestions  he  may  wish 
to  offer  as  to  increasing  or  decreasing  the  quantities  to  be  made,  as  com- 
pared with  previous  orders  issued  to  the  factory  for  the  manufacture  of 
similar  goods. 

As  a  matter  of  convenience  the  Stock-keeper  will  make  requisition  for 
the  same  class  of  goods  only  upon  the  one  requisition,  and  not  use  the  same 
sheet  for  different  classes  of  such  stock  as  may  be  required. 

These  requisitions  for  stock  (Form  200)  are  in  duplicate,  bound  in 
books  of  100  each,  the  first  or  original  perforated  for  removal,  and  also 
punched  at  the  top  for  an  arch  file. 

The  Stock-keeper  must  be  careful  to  have  his  requisition  for  stock  bear 
the  date  he  actually  sends  it  to  the  Manager.  The  latter  issues  Factory 
Orders  (Form  VI.)  for  the  manufacture  of  the  lines  of  which  he  may 
approve,  and  notes  opposite  such  lines  the  number  of  the  order  covering 
same  and  quantity  ordered.  With  regard  to  other  items  upon  the  requisi- 
tion, he  notes  any  decision  or  remarks  lie  may  wish.  This  being  done, 
the  requisition  is  returned  to  the  Stock-keeper,  who  notes  upon  it  the 
date  of  such  return,  and  with  a  colored  pencil  marks  prominently  on  the 
duplicate  in  his  book  the  same  date.  The  original  is  then  placed  upon  an 
arch  file  with  other  requisitions  for  stock,  each  class  of  goods  called  for 
being  separated  by  a  guide  card  indicating  the  nature  of  goods  asked  for. 

It  must  be  understood  thai  this  file  is  for  the  convenience  of  the  Stock- 
keeper  only,  and  while  not  to  be  regarded  as  a  record  further  than  of  the 
issuing  of  certain  factory  orders  For  stock,  will  yel  well  repay  a  little  atten- 
tion on  the  part  of  the  Stock-keeper.  It  will  be  noted  thai  the  Manager 
fills  in  opposite  each  item  the  number  of  the  stock  order,  and  the  quantity 

10 


such  order  calls  for.  As  goods  are  received  into  stock  on  account  of  such 
order,  the  Stock-keeper  draws  a  line  through  the  quantity,  and  substitutes 
the  balance  due.  There  is  no  check  or  balance  upon  this  quantity  so,  as  I 
have  said  before,  these  figures  cannot  be  used  as  the  basis  of  book  entries, 
but  they  will  prove  of  very  great  value  to  the  Stock-keeper,  enabling  him 
to  keep  a  proper  supply  of  various  lines  of  stock,  both  on  hand  and  in  pro- 
cess of  manufacture.  The  duplicates  of  these  requisitions  for  stock  are 
simply  to  prevent  the  very  frequent  error  of  asking  for  the  same  goods  when 
thy  are  already  on  order  in  the  factory,  and  also  of  keeping  the  Stock- 
keeper  posted  as  to  what  lines  of  stock  required  he  has  or  has  not  called 
for.  For  almost  all  purposes  the  information  found  on  these  requisitions, 
and  on  their  duplicate  will  be  all  that  the  Stock-keeper  is  likely  to  require! 
Should,  however,  he  need  closer  information  as  to  the  various  lines  of 
stock  being  manufactured  in  the  shops,  he  has  reference  to  the  card  index 
or  Factory  Stock  Orders. 


O 


THE    M.  Pi. Co., Ltd. 


QEQU/5/T/O/V      r 


OA   3TOCK.  /]      / 


TO     f~7Ars/s4  <0£C 
/F  <jppr-o\ 
For  Otock     <3^  /o//oiv. 


/F  approve*  c/  p/ease- i55U<?    factory    Orc/e-rj> 


Quantity 

ARTICLE 

ORDERED 

QZMAQK5 

Offofff  na 

QUANT/TY 

z  00 

-zoo 
50 

/  "    0i£  ^^Mf,   £fa.   /5Z/ 

Z"  '     ..                -               « 

5"  xf&a™/J/a"at4,JZw.  /&Z7 

ff/7 

/JO 

2,00 

1/  ^nytxri' 

X<m/ zoo s&a&t  7 flirt 

P^1S5£D    UPON 


-?A 


5/C/VED- 


.  Jl^r. 


,  .  .,   ■  „■ 


Form  X  shows  the  card  made  out  for  each  factory  order  issued  for  the 
manufacture  of  stock.  As  has  been  shown,  these  cards  serve  as  an  index  of 
unfinished  orders  in  the  factory,  and  a  record  of  deliveries  on  account  of 
same  to  stock,  and  it  is  only  in  these  ways  that  they  are  of  value  to  the 
Stock-keeper  prior  to  their  completion.  They  serve  as  shown  later,  how- 
ever, after  completion  as  records  of  cost,  comparisons  with  previous  costs 
of  similar  articles,  and  also  a  record,  by  means  of  comparing  dates  issued, 
quantities  called  for,  and  dates  finished,  of  the  past  demand  for  certain 
lines  of  goods.    The  information  on  these  cards,  both  before  and  after  com- 


11 


pletion  of  orders,  being  accessible  to  the  Stock-keeper,  and  taken  in  con- 
junction with  the  information  he  has  on  record  on  his  own  duplicates  of 
requisitions  for  stock,  should  enable  him  to  keep  a  pretty  safe  course 
between  running  too  low,  and  over-stocking  on  the  various  lines  he  han- 
dles. 

When  times  are  prosperous  and  the  turn-over  large,  it  is  an  easy  matter 
to  gradually  lock  up  a  large  part  of  the  profits  made  in  stock,  good,  bad,  or 
doubtful,  as  the  results  may  prove. 

It  is  well  to  remember  that  stock  that  to-day  may  be  good  as  wheat, 
by  such  a  slight  cause  as  the  finding  of  advantages  in  using  other  materials, 
or  other  ways  of  obtaining  certain  results,  or  even  a  change  in  style  or 
fashions — by  any  or  all  of  these  causes,  such  stock  may  be  rendered  in  a 
very  short  time  more  or  less  unsaleable,  and  even  reduced  to  that  least  of 
all  commercial  values — scrap. 

A  gradual  increase  in  the  stock  on  hand  is  unusual,  unless  being  a 
natural  result  of  accumulating  least  marketable  lines  of  stock.  "In 
times  of  peace  prepare  for  war:" — in  time  of  big  demand  for  goods  push 
out  all   doubtful   or  questionable  stock   possible. 

For  convenience  I  have  assumed  that  the  stock  of  the  concern  under 
discussion  be  divided  into  two  main  divisions,  namely,  purchased,  and 
own  manufacture,  and  that  these  are  subdivided  into  three  classes,  namely. 
A,  B,  C.  For  the  sake  of  simplifying  my  description  of  the  system  followed, 
I  have  made  no  reference  to  the  keeping  of  a  Stock  Ledger  in  describing 
the  course  or  treatment  of  any  of  the  forms.  The  question  of  a  stock  ledger 
I  will  take  up  by  itself,  and  if  one  is  to  be  kept,  the  only  change  necessary 
in  the  forms  used  will  be  an  additional  column  for  the  stock  ledger  folio. 

When  stores  are  issued  by  the  Store-keeper  they  are  merely  transferred 
to  another  account  of  the  company.  When  stock,  however,  is  issued,  it 
leaves  the  possession  of  the  company  and  is  transferred  to  another  party. 
It  is  this  differecne  that  causes  the  greatest  difference  in  the  treatment 
of  stock,  and  of  stores. 

It  is  absolutely  impossible  to  provide  a  system  that  will  eliminate  the 
possibility  of  goods  which  have  been  made  for  stock,  being  shipped  or 
delivered  without  being  charged,  but  when  goods  have  been  manufactured 
for  a  certain  customer  there  should  be  no  possibility  of  their  delivery 
without  charge  for  same,  and  if  the  plan  here  described  is  carried  out  in 
all  its  details,  such  an  error  cannot  occur.  The  system  is  intended  to  have 
the  least  possible  clerical  work  done  in  the  Stock-room,  and  as  far  as 
possible  to  have  all  records  and  entries  made  and  kept  in  the  office.  In 
proportion  to  the  carrying  out  of  this  idea  will  the  Stock-keeper's  time  be 
left  free  to  devote  to  the  duties  of  his  department.  In  a  manufacturing  busi- 
ness, if  the  shipments  are  to  be  promptly  made,  and  properly  looked  after, 
the  Stock-keeper  will  require  a  certain  amount  of  time  to  trace  up  in  the 
shops,  articles  being  manufactured  both  for  stock  and  customers'  orders. 

The  question  of  keeping  track  of  selling  prices  and  quotations  given, 
depends  very  largely  on  the  nature  of  the  business  done,  and  the  frequency 
of  quotations  and  prices  being  asked.  In  the  present  state  of  the  market, 
when  so  many  linns  find  it  necessary  to  notify  their  customers  on  the 
face  of  each  invoice,  "Prices  subject  to  change  without  notice,"  this  question 
is  a  very  serious  one. 

If,  owing  to  looseness  in  the  quotation  department,  a  customer  is  quited 

L2 


25c  for  goods  for  which  he  has  been  paying  26c,  the  loss  to  the  firm  is 
frequently  greater  than  the  amount  involved  in  that  particular  order.  It 
is  an  easier  matter  to  drop  a  price  ic  than  to  raise  it  a  very  small  fraction  of 
a  cent,  and  most  buyers  are  somewhat  suspicious  of  an  advance  in  price,  no 
matter  how  small,  when  the  explanation  given  is  that  the  lower  price  was 
an  "error  of  the  quotation  clerk." 


THE  M.PiCo,L~t=/. 
QUOTAT/OA/S  G/l/fA/ 


Given  to 


-^JE 


70     G>Al^Mf^^"^ 


Book  foo  Quotat/ohs    O h/£/v 


V 


PP/CE 


3$0~£ac/, 


AEMAPK5 


fr 2  70"  Tut  fie*  Zf 
(foci/  (P,ntn/   *■//'/<» 


No  matter  how  strictly  a  firm  tries  to  carry  out  the  "orie  price  to  all" 
idea,  it  is  few  firms  who  in  the  present  day  do  not,  more  or  less  frequently, 
sell  exactly  the  same  goods  to  different  customers  at  different  prices.  In 
view  of  these  facts  the  time  expended  in  keeping  accurate  records  of  selling 
prices  and  quotations  given,  while  to  some  appearing  to  be  wasted,  may 
be  of  great  value  in  the  results  obtained.  Unfortunately  the  results 
of  such  work,  though  very  real  and  tangible,  may  be  almost  invisible, 
while  the  labor  expended  to  obtain  them  may  be  very  evident.  The 
system  here  described  may  or  may  not  suit  individual  cases,  but  the  rule 
that  no  quotation  shall  be  made  without  being  put  on  record  where,  if  an 
order  is  given  or  the  quotation  asked  for  again  (no  matter  after  what  length 
of  time),  it  may  be  accessible — is  sound. 

Discounts  and  selling  prices  of  such  goods  as  appear  in  the  company's 
catalogue,  are  listed,  preferably  in  private  mark  in  a  catalogue  bound  with  a 
blank  leaf  between  each  illustrated  or  printed  page.  This  catalogue  is  kept 
at  the  Order  Clerk's  desk.  After  this  plan  has  been  in  vogue  for  some 
time,  and  the  selling  prices  of  most  of  the  firm's  product  is  listed,  many 
inquiries  received  by  mail  or  phone  can  be  answered  from  the  information 
there  obtained. 

The  Billing  Desk  being  provided  with  a  desk  phone,  a  Memo  Book 
of  any  convenient  size,  called  the  "Quotation  Given  Book,"  is  kept  beside 
it.  This  is  simply  a  memo  book — the  only  ruling  being  a  line  marking  off  a 
column  about  one  and  a  half  inches  on  the  left  hand  side.    When  a  quota- 


L3 


tion  is  asked  for  over  the  phone  which  cannot  be  given  from  the  informa- 
tion contained  in  the  catalogue,  the  details  of  the  article  called  for  are 
entered  in  this  book  with  only  the  name  of  the  party  inquiring  in  the  left 
hand  column.     This  results  in  the  loss  of  a  certain  amount  of  space,  but 


//&  %*us 


AJmA^ct^tx. 


ii 


/C£AyxI£?/<.5 


J^ ^tk^r-rrt^U^^  /r-f     £?■/.{/     /U 


23 


<JteYi/   /Sff. 


$ 


*6 


O.  A  Fob  Mamufa  c  tuoe 


O  AC   Fo/i   CnE.Dt-r 


WAN  A  GEO 


3£Cy.-  TGEA5. 


roarr    ,2  o  ;s 


this  loss  is  more  than  counterbalanced  by  the  greater  ease  with  which  any 
required  name  may  be  found.  The  specimen  of  this  form  is  simply  for  the 
purpose  of  showing  how  easily  any  name  may  be  found  in  such  a  book, 
if  the  column  is  reserved  for  names  only.  The  price  quoted  is  entered,  and 
if  an  order  is  received  at  once  that  fact  is  also  noted  and  the  order  written 
out  on  Memo  Order  (Form  202).  A  small  index  in  connection  with  this 
book  will  prove  of  great  value,  and  occupy  but  little  time  to  keep  entered 


THE.    na.C0..1-*f   QtlOTAT,OH3  tin,**. 


//V- 

/s  2»0^e 

z/o/°> 

zs 

l/zi/o/ 

/    /0"j6&u~, 

Cu/04 


JoOU 


up.     Each  morning  the  quotations  in  this  book  and  also  those  which  may 
have  been   made  by   letter,  and  a  copy  of  which  will,  of  course,  be   found 
in  the  Letter  Book,  are  entered  upon  a  "Quotation  Given  Card  (  Form  203). 
This  card  is  filed  away  (alphabetically)  in  an  index  drawer  called  "Q1 
tions  Given  Index"  with  what   guide  cards  may  be  necessary,     [f  desirable 


1  I 


this  index  may  be  arranged  according  to  towns — the  cards  for  each  town 
being  classified  alphabetically  by   customer's   name. 

At  first  sight  it  would  appear  as  though  this  plan  would  result  in  a  very 
large  accumulation  of  cards  containing  quotations  given.  If,  however, 
the  firm  is  in  possession  of  a  pretty  complete  catalogue  of  goods  of  their 
manufacture,  and  the  Order  Clerk's  copy  of  this  catalogue  used  as  and  to 
the  extent  it  should  be,  it  will  be  found  that  by  using  both  sides  of  these 
cards,  very  few  customers  will  require  more  than  one  card  a  year.  When 
a  new  year  begins  cards  of  another  color  should  be  used,  and  at  the  end  of 
say  six  months  all  cards  of  the  previous  year  may  be  taken  out  and  filed 
away — classified  and  indexed  on  the  same  lines.  It  will  thus  be  seen 
that  the  current  index  will  always  contain,  at  least,  six  months'  quotations, 
while  quotations  given  previously  will  all  be  together  in  such  shape  as  to 
be  immediately  available  for  reference  if  required. 

customers'  orders. 

The  ideal  system  of  keeping  and  handling  of  customers'  orders  consists 
in  the  making  out  of  a  card  for  each  order  received,  filing  this  card  in 
indexes  arranged  according  to  province,  town,  and  alphabet,  and  on  this 
card  noting  all  transactions  in  connection  with  such  order — from  the  time 
it  is  received  until  the  last  item  is  either  shipped  or  cancelled,  or  the 
customer  advised  to  that  effect. 

Except  in  exceptional  cases  such  as  a  business  having  branches  located 
in  various  parts  of  the  country,  and  each  branch  doing  a  large  business, 
this  plan  is  too  cumbersome,  expensive,  and  complicated,  and  will  result 
in  too  much  duplication  of  work  to  be  a  wise  one  to  adopt. 


Oc?7e. 
Jj&7.  /90/ 


THE    M.&.Co.,LTD. 

^H/PP/NG  ORDER 
SOLD  8V 


3  #W 


INVO,CE  N0/4/l 


\Jf.<?. 


QUANTITY 

AGTJCLZ- 

FoKrt 
NO. 

C05T 

SOLD 

CIA5S 

Remarks 

Pf>  i<Z  £ 

V-Xi-Mf 

P&ICE 

\ALUf 

JO 

OyO&jS^-  <?*■  MS 

F( 

rm  ; 

00 

lo 

00 
5a. 

00 

00 

00 

. 

■>. 

C 

The  alternative  plan  is  to  make  the  order  itself  after  it  has  been  issued 
to  the  sbhipper  bear  on  its  face  all  the  information  above  spoken  of,  but 
to  also  keep  in  the  office  accurate  and  promptly  obtainable  information  as 
to  the  exact  location  of  any  given  order,  and  to  show  not  only  in  whoso 


ir> 


possession  such  order  may  be  found,  but  also  its  exact  location  among 
the  other  orders  which  the  same  employe  may  have,  and  if  filed  away,  to 
show  the  number  of  the  page  of  the  book  of  which  it  has  become  a  part. 

The  term  "Shipping  Order"  is  hereafter  used  to  designate  written 
instructions  to  the  Stock-keeper  or  Shipping  Clerk  to  ship  or  deliver  certain 
goods  to  a  named  party.      Such  shipping  order  bears  a  number  with  the 


THE  MQ.  Co.. Lie/. 

D*rf  OEL-I^Ep-y     St- IP 

Jtiu./foi 

Please.  ffECB/VE  foom  The  MP  Co,/.*/ 
//v  cooo  oaoE&  Afi/o  condition  as  Follows: 


$0 


J:/4  /o/s. 


foa/i  £03  6. 


r\L£P   Tfl/S   SulP> 


prefix  "R"  and  emanates  only  from  the  office.  The  rule  is  that  no  stock 
must  be  shipped  or  delivered  without  such  written  instructions  from  the 
office.  In  most  businesses  it  will  be  found  impracticable  to  strictly  live  up 
to  this  rule,  but  the  only  exception  that  should  be  made  is  the  giving 
to  the  Stock-keeper  a  certain  amount  of  authority  to  ship  such  stock  as  may 
be  sold  by  him  or  his  assistants  personally.  In  such  event  he  charges 
them  out  on  a  form  exactly  similar  to  the  Shipping  Order,  but  bearing  no 
register  number.  Such  forms  are  handed  to  the  Billing  Clerk  at  certain 
times,  and  by  him  entered  in  the  register  and  given  a  number. 

This  form  is  exactly  the  same  as  the  Shipping  Order,  but  is  padded  in 
such  a  way  that  by  the  one  writing  the  Stock-keeper  makes  out  a  Ship- 
ping Order  (Form  203a),  Delivery  Slip  (203b),  and  Receipt  (203c).  A 
reference  to  these  forms  shows  that  they  each  take  only  such  information  as 
properly  belongs  to  them — for  the  purpose  for  which  they  are  used. 

In  most  convnient  access  to  the  Order  Clerk  is  a  cabinet  containing 
as  many  drawers  as  may  be  required,  labeled  as  may  seem  best  either 
acording  to  customr's  name,  or  of  alphabetical  divisions.  The  drawers  in 
this  cabinet  are  about  9"xi2".  Each  drawer  contains  a  set  of  manilla 
sheets  so  cut  for  index  purposes  as  may  be  decided  upon.  These  manilla 
sheets  are  kept  in  their  place  by  rods  running  through  perforations  at  the 
extreme  inner  c(\^e  and  held  together  by  an  easily  released  spring. 

As  soon  as  a  shipping  order  is  made  out  or  received  upon  the  proper 
form  it  is  entered  in  the  "Shipping  Order  Register"  (Form  204)  and  given 
the  first  blank  number  therein. 


16 


Given  the  above  appliances  and  the  necessary  forms,  the  proper  and 
complete  carrying  out  of  this  system  in  all  its  details  should  make  the 
"Shipping  Order  Dept."  one  of  the  most  smoothly  running  branches  of  all 
the  clerical  work  in  the  entire  business.  If,  however,  the  detail  or  routine 
work  of  this  system  is  allowed  to  run  behind,  or  if  certain  details  appa- 
rently useless  and  unnecessary  are  not  carried  out,  then,  when  the  informa- 
tion which  ought  to  be  obtainable  from  this  department  at  a  moment's 
notice  is  asked  for,  it  will  be  useless  to  expect  the  results  which  alone  can 


THE  MP  Co.  Liz/ 
3 .iff.  /fO/ 


QEaE.IVE:0  foom   TheM  Q  C0..L*/, /"  oooo 

0ffD£O    A/YD   CO/VD/r/O/V   A5     FOLLOWS: 


JO 


6a&  ^^oc^KI  J?4.    '0'3 


roa/v  Z03  C 


■D'Qn  and  ne^O/^r/t 


prove  the  value  of  this  plan.     If  the  plan  is  in  all  its  details  carried  out 
as  intended  the  cabinet  of  drawers  referred  to  will  show  at  any  time. 

A.  The  date  goods  called  for  and  all  other  details  of  all  orders  on  hand 
to  ship,  or  simply  supply  stock  to  any  named  person,  and,  which  not 
having  been  entirely  shipped  or  cancelled  may  be  called  "Uncompleted 
Shipping  Orders." 

B.  On  such  orders  there  may  be  one  or  more  register  numbers,  if 
only  one  the  order  is  still  in  the  Shipping  Clerk's  hands.  If  more  than 
one,  the  last  one  contains  such  articles  as  have,  not  vet  been  shipped 
and  is  in  possession  of  the  Shipping  Clerk.  The  others  are  part  ship- 
ments and  have  become  pages  of  the  Binder  called  the  "Day-Book  Details." 

C.  On  these  uncompleted  shipping  orders  there  may  be  found  one  or 
more  numbers  with  "F.  O."  before  them,  This  indicates  "Factory  Orders," 
and  shows  the  manufacturing  order  numbej  r>n  which  certain  required 
articles  are  being  made  up  in  the  shops. 

Before  proceeding  to  describe  in  detail  the  forms  required  and  course 
followed,  it  must  be  distinctly  understood  that  with  the  exception  already 
mentioned  of  goods  sold  directly  in  the  Stock-room,  this  cabinet  receives 
the  original  authority  for  all  Shipping  Orders  issued  by  or  from  the  office 
to  the  Stock-keeper,  classified  as  may  be  found  best  and  each  class  arranged 
alphabetically.  This  cabinet  retains  such  original  authority  until  all  the 
goods  called  for  have  either  been  supplied  or  the  order  cancelled. 

This  original  authority  may  be : 

A.  A  customer's  written  official  order. 

B.  A  letter. 

17 


C.  A   telegram. 

D.  A  Memo  order  (Form  202). 

The  first  three  will  reach  the  firm  in  the  ordinary  course  of  business ; 
the  last,  the  memo  order,  is  used  when  none  of  the  other  three  are  received 
by  the  company,  or  when  being  received  they  contain  more  than  the 
actual  order  and  are,  therefore,  required  by  other  than  the  Order  Dept. 

In  some  cases  memo  orders  may  be  used  to  supplement  or  explain  a 
letter  or  telegram,  in  which  event  they  are  attached  to  the  letter  or  tele- 
gram as  the  case  may  be. 

Memo  Orders  (Form  202)  are  put  up  in  pads  of  about  100  each,  and 
are  supplied  to  any  employee  who  is  likely  to  take  an  order  from  a  cus- 
tomer, either  verbally  or  by  telephone.    As  I  have  said,  these  memo  orders 


TH£  M.Q  Co,LicJ 

FiEG/STEQ  OF  Ofl/PP/A/G    OQDEQ3 


50LDBY 


5H/PPED 


P>E/1ADK5 


'<].:  1   .  d 


%KnaJ   %  (So. 


Qjea&4  hJ/u> 


Jx 


-OtfT 


jMy 


/3<?Z 


jxfjee  8. a  ^erjy 


are  used  when  no  other  written  authority  for  the  issuing  of  shipper's  order 
has  been  received.  When  an  order  is  receivd  over  the  phone,  the  name 
of  the  party  giving  it  should  be  ascertained  and  noted  on  this  form,  and 
if  an  order  is  given  verbally  by  the  employee  of  any  customer,  his  name 
should  be  marked  or  he  should  initial  the  form. 

In  some  cases  it  will  be  found  advantageous  to  supply  certain  em- 
ployees who,  while  not  actually  travelers,  would  have  frequent  use  for  it, 
with  a  book  of  these  forms  perforated  for  removal. 

In  a  great  many  cases  customers  (particularly  out  of  town)  would  be 
glad  to  accept  and  use  pads  of  these  forms,  and  this  would,  in  many  cases, 
result  in  that  much  to  be  desired  end — of  having  such  part  of  the  corre- 
spondence received  by  the  firm  as  may  contain  orders,  kept  entirely  sep- 
arate from  that  treating  of  other  matters.  When  a  letter  is  received  con- 
taining, in  addition  to  an  order,  other  matters  requiring  the  attention  of 
other  employees  than  those  of  the  Order  Dept.,  such  part  as  should  be  sent 
to  the  Order  Dept.  is  indicated  by  means  of  a  colored  pencil  and  the  stenog- 
rapher makes  a  copy  of  this  indicated  part  on  a  Memo  Order. 

Travelers'  orders  are  received  on  the  regular  Shipping  Order  forms, 
and  the  stenographer  makes  out  a  copy  on  a  Memo  Order,  both  then  going 
to  the   Order   Clerk.     The   original    is   given   a   registered   number   in   the 


IS 


usual  way,  and  this  number  is  noted  on  the  stenographer's  copy,  which  is 
then  filed  in  the  index  as  an  original  authority. 

Such  mail  as  contains  only  orders  goes  directly  to  the  Order  Clerk, 
who  at  once  makes  out  a  Shipping  Order  (203a)  for  the  goods  called  for. 
This  shipping  Order  he  enters  in  the  register  opposite  the  first  blank  num- 
ber, which  number  he  places  on  his  original  authority. 

When  the  Order  Clerk  knows  that  a  Factory  Order  (VI.)  will  be 
required  for  the  making  of  goods  called  for,  he  makes  out  such  order  and 
sends  to  the  Factory  Office  in  the  usual  way,  noting  on  the  Factory  Order 
for  which  the  goods  are  required,  the  register  number  of  the  Shipping 
Order  and  also  noting  on  the  Shipping  Order  in  the  column  marked  number, 
the  number  of  the  Factory  Order  which  he  has  issued.  This  Factory  Order 
number  he  also  notes  on  his  original  authority,  whether  letter,  telegram, 


THE  M.Q  Co.  Lid. 

MEMO    /N\ZO/CE 


7rfes    .Ah- Sf    -sQ.ta<^  „/&<!■ 


DA  T£      Q^/m  Z  7 


M,*?***    -7?\. 


<ZjTo    4^2, 7        ^//Ot+  ^cPy&^£/ 

/3 

<&/  jCr^/6^-      dj&teca^^^sttJ^^C&trHiZ^ 

ro&/~r    ^  0^5 

PQ/CED   /NVO/CE    TO  rOLL-OW-' 

or  memo  order  as  the  case  may  be,  and  which  original  authority  is  then 
filed  away  in  the  Shipping  Order  cabinet,  and  the  Shipping  Order  itself  sent 
out  to  the  Stock-room  for  attention. 

The  specimen  of  Memo  Order  (202)  here  given,  it  will  be  seen,  con- 
tains three  register  numbers.  The  first  is  the  original  order  issued  to  the 
Shipping  Dept. ;  the  others  being  such  part  as  has  been  transferred  to  back 
orders  when  part  shipments  have  been  made.  In  the  case  in  question  the 
register  will  show,  as  later  explained,  the  page  of  the  Day-Book  which 
the  original  order  has  now  become,  and  also  the  pages  of  the  various  part 
shipments  made.  The  last  register  number,  if  having  no  invoice  number 
opposite  it,  is  thus  shown  to  be  in  the  possession  of  the  Shipping  Clerk, 
awaiting  fulfillment  of  the  last  lines  of  such  order.  The  Order  Clerk  (if 
the  work  is  kept  up-to-date)  will  have  in  his  possession  each  day  only  the 
shipments  of  the  previous  day,  and  these  he  should  hand  to  the  Billing 
Clerk  at  an  early  hour  enough  to  permit  invoices  being  mailed  the  day 
after  shipment  of  goods,  if  not  on  the  same  day. 


19 


(  HAPTER   IV. 
Orders. 

In  a  manufacturing  business  it  is  impossible  that  invoices  should  be 
mailed  always  the  day  the  goods  are  shipped  or  delivered,  though  in  many 
cases  this  would  be  the  result  of  carefully  carrying  out  this  system.  If, 
however,  a  certain  percentage  is  got  out  the  day  of  delivery,  the  getting 
out  of  the  balance  the  day  after  delivery  is  that  much  easier,  and  except  in 
very  exceptional  cases  invoices  can  and  should  be  mailed  within  the  24 
hours  after  the  goods  have  left  the  possession  of  the  company. 

In  exceptional  cases  where  this  may  be  impossible,  such  as  being 
unable  to  bill  for  a  customer  until  other  goods  are  sent  forward,  or  being 
unable  to  ascertain  the  cost  price  upon  which  the  selling  price  is  to  be 
based,  the  charge  must  necessarily  be  held  over.  In  such  cases  to  give 
the  customer  an  opportunity  of  checking  the  quantity  of  goods  received 
a  Memo  Invoice  (Form  205)  is  sent,  and  the  date  such  memo  is  sent  noted 
on  the  Shipping  Order.  These  forjns  may  be  bound  in  books,  in  duplicate 
with  the  original  perforated  for  remove!,  or  a  letter-press  copy  of  them 
may  be  taken. 

The  Stock-keeper  is  supplied  with  two  files  for  his  Shipping  Orders ; 
one  for  current  orders,  or  such  as  he  may  reasonably  expect  to  ship  at 
once,  and  one  for  back  orders — that  is,  orders  which  cannot  be  shipped  at 
once,  on  account  of  goods  having  to  be  manufactured,  or  from  some  other 
reason.  The  orders  on  this  back  order  file  are  arranged  alphabetically,  and 
thus  all  back  orders  for  a  certain  customer  will  be  together. 

In  a  large  business  and  as  a  matter  of  convenience,  it  might  be  well  to 
provide  two  such  files,  for  city  and  country  customers  respectively.  A 
more  convenient  file  than  any  spring  book-binder  is  a  plain  board  file — 
a  little  longer  than  the  Shipping  Orders,  with  a  spring  clip  at  the  left-hand 
side,  a  sheet  of  ordinary  heavy  paper  being  used  if  found  advisable,  to  pro- 
tect the  top  order. 

The  Stock-keeper  will  also  be  provided  with  a  wire  correspondence 
basket,  in  which  he  places,  as  they  are  ready,  all  papers  intended  for  the 
office,  whether  Shipping  Orders,  Credit  Notes,  Way  Bills,  etc.  The  con- 
tents of  this  basket  are  taken  into  the  office  four  times  each  day,  and  at 
stated  and  regular  hours. 

!li'-  (  >rder  <  !lerk  is  provided  with  a  similar  basket,  in  which  he  places 
all   orders,  whether   for  Stock-keeper  or   Factory  Clerk.     This   basket  is 

emptied  at  stated  hours,  and  the  contents  delivered  to  those  for  whom 
intended. 

(  >n  re  ip1  of  a  Shipping  Order  the  Stock-keeper  firsl  ascertains  if  any 
of  the  goods  called  for  will  have  to  be  specially  manufactured,  and  also  if 
he  can  supply  enough  to  make  a  part  shipment,  or  if  the  entire  order  will 
await  such  manufacture,  hi  the  latter  event  he  marks  in  the  space  for 
remarks,  F.  O.  (Factory  Order),  opposite  such  lines  as  will  have  to  be 
manufactured,  and  puts  the  order  in  the  correspondence  basket.  If.  how- 
ever, his  intention  is  to  make  a  part  shipment,  he  puts  the  order  on  his  tile 
alter  marking  the  necessary  items  as  above. 

When  a  shipment   i^  being  made  ready,  he  checks  off  each  item  as  it 

20 


is  packed  or  laid  out  ready  for  shipment,  and  if  the  entire  quantity  called 
for  of  each  item  is  marked  in  the  column  headed  quantity  shipped.  This 
denotes  that  that  particular  line  has  been  entirely  supplied.  If  there  is 
any  difference  in  quantity  between  what  he  ships  and  what  the  order 
calls  for,  he  marks  plainly  the  quantity  which  he  actually  ships  or  delivers. 
If  the  balance  is  to  be  shipped  at  a  later  date,  he  marks  B.  O.  (Back  Order) 
in  the  space  for  remarks,  and  places  the  Shipping  Order  in  the  correspon- 
dence basket  for  transmission  to  the  office. 

In  the  case  of  out-of-town  shipments  a  duplicate  Bill  of  Lading  is 
made  out,  and  this  also  goes  to  the  office,  and  from  there  is  forwarded  to 
customer. 

If  the  Stock-keeper  makes  a  sale  direct  from  stock,  he  makes  out  a 
Shipping  Order  without  a  register  number,  which  order  is  also  placed  in 
the  basket  intended  for  the  office.  On  receipt  by  the  office  of  these  Shipping 
Orders,  etc.,  the  register  number  of  each  which  contains  such  number  is 
looked  up  in  the  register  and  the  date  (and  in  large  businesses  possibly 
the  hour  also)  of  receipt  by  the  office  is  noted  in  the  column  ruled  for  that 
purpose.  Such  orders  as  the  Stock-keeper  has  filled  without  a  register  num- 
ber are  entered  in  rotation  in  the  register,  and  the  numbers  thereof  noted 
on  their  face. 

The  Order  Clerk  then  selects  such  orders  as,  owing  to  a  part  shipment 
having  been  made,  the  balance  must  be  transferred  to  another  Shipping 
Order,  or  such  as  require  Factory  Orders  to  be  issued  for  one  or  more 
items  upon  them.  A  back  order  is  exactly  the  same  as  an  ordinary  Ship- 
ping Order,  but  is,  of  course,  made  out  for  such  lines  or  quantities  only 
as  remain  unsupplied,  and  are  given  the  next  blank  number  in  the  register 
exactly  as  though  they  were  new  orders. 

Back  orders  are  of  the  same  color  as  the  original  from  which  they  are 
transferred.  For  convenience  in  sorting  or  looking  up  a  particular  order, 
it  is  well  to  have  them  of  an  entirely  distinct  shade.  This  plan  will  be  found 
better  and  more  satisfactory  than  using  four  colors.  A  very  satisfactory 
arrangement  has  been  found  to  be  the  following: 

Original  city  orders — cream  color; 
Back  city  orders — canary  color  ; 
Original  country  orders — pale  blue ; 
Back  country  orders — medium  blue. 

On  this  system  we  have  four  distinct  classes  of  orders,  distinguishable 
at  a  glance.  The  fact  yet  remains  that  city  orders  are  always  yellow, 
and  country  orders  always  blue.  This,  of  course,  applies  only  to  the  Ship- 
ping orders  ;  the  Memo  orders  may  be  of  any  color  preferred. 

As  back  orders  for  balance  of  order  or  Factory  orders  for  certain 
goods  ae  made  out,  the  "original  authority"  for  the  Shipping  Order  is 
taken  from  the  file,  and  the  new  numbers  noted  thereon. 

The  "original  authority"  for  such  orders  as  are  completed  is  removed 
from  the  file,  stamped  with  an  adjustable  date, 

Shipment    completed 
22nd  March,  1901, 

and  filed  away  in  index  boxes  with  the  date  of  contents  noted  thereon. 

The  Order  Clerk  then   selects  such   of  the  Shipping  orders  as  he  is 

21 


unable  to  charge  to  the  customer  without  knowledge  of  the  cost  of  the 
article  supplied.  These  he  hands  to  the  Pricing  Dept.  The  costs  of  the 
orders  on  which  the  articles  supplied  were  manufactured  is  at  once  made  up 
and  the  shipping  orders  returned  to  the.  Order  Clerk.  These  shipping 
ordrs  are  then  arranged  alphabetically;  city  and  country  in  separate 'lots, 
and  here  will  be  seen  the  advantage  of  having  the  "original  authority" 
for  orders  arranged  in  the  cabinet  alphabetically,  instead  of  by  travelers' 
route,  or  by  district.  The  prices  at  which  the  various  goods  are  to  be  billed 
to  customer  is  then  filled  in  by  the  Order  Clerk,  and  the  shipping  order 
handed  over  to  the  Invoice  Clerk,  to  whom  has  been  previously  delivered 
all  duplicate  Bills  of  Lading.  By  this  clerk  the  extensions  are  checked,  the 
entry  and  invoice  number  noted  on  the  shipping  order,  and  also  in  the 
register  opposite  the  numbers  of  such  shipping  orders. 

The  shipping  orders  then  go  back  to  the  Pricing  Dept.,  where  all 
the  costs  of  the  items  shipped  arc  entered  in  the  column  for  that  purpose, 
and  the  class  of  goods  or  division  of  stock  which  is  to  receive  credit  for 
the  sale  is  indicated  in  the  column   for  that  purpose. 

In  the  case  under  consideration  let  M  represent  goods  manufactured  by 
the  firm,  and  P  represent  stock  purchased  from  outsiders,  and  A,  B  and  C 
the  different  classes  of  stock  handled.  The  proper  use  of  these  letters  in  the 
columns  devoted  to  that  purpose  would  enable  the  Factory  Accounting 
Dept.  to  show  at  the  close  of  each  month  what  quantity  of  the  total  stock 
shipped  was  purchased  or  manufactured  stock,  and  also  the  value  of  the 
shipments  for  the  month  of  the  various  classes  of  stock,  both  manufactured 
and  purchased. 

In  the  event  of  any  stock  being  delivered  and  sent  out  for  which  no 
charge  is  made  to  customer,  the  regular  routine  is  followed  in  every  respect 
and  detail,  except  that  no  selling  price  is  extended  on  either  shipping  order, 
invoice,  or  Day  Book  entry.  These  are  all  made  in  the  usual  way,  the 
invoice,  however,  being  marked  "no  charge."  This  plan,  carefully  followed, 
enables  the  stock-keeper  to  make  sure  that  no  stock  leaves  his  possession 
without  being  recorded.  It  remains  for  the  Accounting  Dept.  to  charge 
the  value  of  such  shipments  as  are  not  to  be  billed  to  a  customer  to  the 
account  to  which  they  properly  should  be  debited. 

On  the  face  of  it  this  system  appears  to  have  considerable  detail  work 
which  might  be  avoided.  In  practice  it  will  be  found  not  more  than 
necessary,  if  the  object  is  to  keep  track  of  all  orders,  shipments,  and  deliv- 
eries is  to  be  obtained. 

The  Order  Clerk  must  be  particular  whenever  he  receives  an  order 
from  the  Shipping  Dept.,  for  which  no  back  order  is  required,  to  remove 
the  "original  authority"  from  his  cabinet.  If  this  "original  authority"  i> 
then  filed  away  ly,  and  distinct  from  other  correspondence  of  the 

company,  the  Order  Clerk-  can  immediately  procure  all  orders  from  a  given 
customer.  A  glance  on  the  face  of  the--  orders  will  show  at  once  which 
are  complete,  ami  which  are  still  remaining  partly  or  altogether  unshipped. 

From  the  information  on  these  orders,  and  the  folios  obtainable  by 
reference  to  the  register,  the  Order  Dept.  can  turn  up  al  once  the  Day 
Book  entry  for  any  or  all  items  required,  and  from  the  register  can  also  see 
at  a  glance  if  the  ord<  uncompleted,  whether  it  is  in  the  possession  of 

the  Shipping  Dept.,  awaiting  fulfillment,  or  of  the  office  awaiting  prices 
and    i  harging. 


CHAPTER  V. 
Billing   and   Charging. 

The  system  which  I  have  described  may  he  used  with  an  ordinary 
Day  Book,  the  Billing  Clerk  simply  making  the  entry  in  the  usual  way 
from  the  shipping  order,  the  extensions  of  which  he  checks  as  he  makes 
the  entry,  and  afterwards  writes  out  an -ordinary  invoice,  the  number  of 
which  he  notes  on  the  Shipping  Slip. 

A  better  plan  is  to  use  one  of  the  several  good  forms  of  loose  leaf 
Day  Books,  by  which  Day  Book  entry  and  invoice  are  made  out  by  the  one 
writing.  The  saving  of  time  by  this  plan  is  considerable,  but  the  greater 
gain  lies  in  the  fact  that  the  Day  Book  being  a  loose  leaf  binder,  the  Invoice 
Clerk  requires  only  such  pages  as  may  constitute  that  day's  work,  the  pre- 
vious charges  are  at  the  disposal  of  the  Ledger-keeper,  who  should  then  be 
able  to  keep  his  posting  perfectly  up-to-date. 

A  loose  leaf  Credit  Book  should  be  kept  on  the  same  lines  as  the  Day 
Book.  The  credit  entry  and  note  are  made  out,  given  the  next  consecutive 
credit  number,  which  is  noted  on  the  Memo  or  letter  under  authority  of 
which  credit  entry  is  made.  Such  credit  memo  or  letter  is  then  filed  away 
with  the  completed  shipping  orders. 

It  is  essential  that  neither  shipping  order  nor  credit  note  be  made  out 
for  any  amount  or  quantity  without  written  authority,  for  such  entry  being 
in  possession  of  the  Order  Department,  and  such  written  authority  posi- 
tively must  under  all  circumstances  be  such  that  it  may  remain  in  posses- 
sion of  the  order  department,  and  not  be  required  by  any  other  department 
of  the  business. 


CHAPTER  VI. 
Delivering   and  Shipping. 


The  chief  idea  in  connection  with  the  shipping  and  delivering  of  stock 
has  been  in  all  cases  to  keep  an  itemized  record  of  articles  delivered  to 
invariably  obtain  a  receipt  for  such,  and  to  do  this  with  the  least  possible 
amount  of  clerical  work  by  stock-keeper  or  shipper. 

As  regards  goods  sold  and  delivered  to  purchaser  or  his  representative, 
personally  in  the  stock-room,  we  have  already  seen  how  the  Delivery  Slip 
to  accompany  such  goods,  and  the  receipts  for  same  are  made  out  by  the 
one  writing  with  the  Charge  Slip. 

For  city  shipments  the  Stock-keeper  makes  out  similar  Delivery  Slips 
and  Receipts— which  the  carter  takes  with  him.  The  former  is  given  the 
customer,  and  the  receipt  brought  back  by  the  carter.  It  will  be  noted 
that  these  receipts  are  perforated  for  filing  on  a  binder.  It  is  not  necessary 
that  they  should  be  permanently  put  away  in  this  form.  Two  binders  may 
be  kept  in  the  stock-room,  each  containing  receipts  for  one  month.  At  the 
end  of  the  second  month  the  receipts  are  taken  off  the  binder,  and  put 
away  (labelled  with  the  month  they  are  for).  The  Stock-room  will  thus  be 
always  in  possession  of  receipts  for  at  least  one  month's  deliveries, — older 

23 


receipts  than  two  months  being  filed  away,  labelled  by  the  month,  and  thus 
easy  of  access. 

The  chief  advantage  of  this  plan  is  that  the  carter  carries  only  receipts 
for  the  current  day's  delivery,  so  if  he  loses  his  book  the  loss  is  confined 
to  as  small  a  number  of  receipts  as  possible,  also  if  a  receipt  for  goods 
delivered  on  a  certain  date  is  asked  for,  all  receipts  of  that  date  will  be 
together,  and  there  will  thus  be  no  necessity  to  look  through  several  books.' 

Instead  of  the  ordinary  form  of  Bill  of  Lading  supplied  by  carriers, 
many  firms  find  it  to  their  advantage  to  supply  their  own — even  at  the  addi- 
tional cost  involved. 

These  Bills  of  Lading  are  padded  in  such  a  way  that  by  the  use  of  "full 
carbon"  three  copies  are  obtained.  The  first  signed  by  the  carrier  remains 
in  possession  of  the  stock-keeper,  and  is  filed  away  similarly  to  the  receipts 
described  above.  The  second,  or  flimsy,  copy  is  placed  in  the  stock-keeper's 
correspondence  basket — thus  reaches  the  office  and  is  forwarded  to  custo- 
mer, either  with  invoice,  or  for  reference,  by  mail  on  the  day  shipment  is 
made. 

For  deliveries  to  retail  branch  three  slips  are  required.  These  may  be 
made  out  with  one  writing.  The  retail  branch  being  supplied  cost  price, 
plus  a  percentage  for  handling  goods.  Such  deliveries  are  only  a  transfer, 
not  a  sale.  The  delivery  slip  and  receipt  are  treated  in  the  usual  way. 
The  Charge  Slip  goes  to  the  Cost  Department,  where  the  cost  is  extended, 
percentage  added,  and  the  slip  then  handed  to  the  Invoice  Clerk.  The 
Invoice  clerk  then  makes  out  a  Memo  Invoice,  but  makes  no  book  entry. 
This  invoice  is  sent  to  the  retail  branch  and  the  charge  slip  turned  over  to 
the  accounting  department.  The  book  entries  made  from  these  charge  slips 
will  be  described  later. 


CHAPTER  VII. 
Stock  Ledger. 


In  a  business  such  as  we  are  considering  the  question  of  Stock  Ledgers 
is  both  important  and  a  much  disputed  one.  The  mere  deciding  between 
unwieldy  and  bulky  books  or,  on  the  other  hand,  too  many  books  of  similar 
sizes  requires  some  thought.  The  advantages  of  a  stock  ledger  as  a  per- 
petual inventory,  are  but  very  small  in  actual  practice,  but  it  has  advantages 
as  a  record  of  the  salability  or  unsalability  of  various  lines  as  shown  by  past 
transactions  which  can  hardly  be  estimated.  If  a  stock  ledger  is  kept  all 
entries  for  manufactured  or  purchased  goods  of  a  similar  kind  must  be  care- 
fully kept  apart,  and  to  do  this  involves  the  disadvantage  of  keeping  similar 
goods  in  different  ledgers,  or  else  the  serious  risk  of  confusing  two  classes 
of  stock  handled. 

These  ledgers  are,  of  course,  records  of  quantity  only,  not  of  values. 
At  time  of  inventory  an  inventory  sheet  is  used,  and  upon  this  form  the 
inventory,  as  shown  by  the  books,  is  taken.  This  form  should  be  provided 
both  for  price  and  extension  of  values,  and  should  approximately  agree  with 
a  physical  inventory  of  same  date. 


If  the  costs  of  the  various  goods  are  noted  on  the  accounts  in  the 
stock-keeper's  ledger,  a  very  close  average  will  be  obtainable  at  closing  of 
the  year's  business. 

Whether  the  information  or  results  obtainable  from  a  stock  ledger  are 
sufficiently  valuable  to  justify  time  and  labor  required  to  properly  keep 
them  is  a  question  each  management  must  decide  for  themselves. 

If  kept,  however,  under  no  circumstances  must  a  debit  or  credit  entry 
be  made  without  quoting  the  authority  therefor.  In  this  case,  if  physical 
and  book  inventories  are  far  out  of  balance,  adjusting  same  would  only  be 
a  question  of  time,  checking  all  entries,  and  granting  that  the  inventory  at 
opening  of  ledgers  was  correct,  as  also  the  year's  charges  and  credits,  the 
difference  would  then  resolve  itself  into  a  simple  question  of  stock  taking 
or  of  shipping  without  charging. 

In  no  department  of  a  manufacturer's  account  does  the  old  rule  hold 
better  than  in  this  much  disputed  question  of  stock  ledgers:  If  a  thing  is 
worth  doing  at  all,  it  is  worth  doing  well ;  if  it  is  not  worth  doing  well,  it  is 
not  worth  doing  at  all. 


CHAPTER  VIII. 
Pro-rating    Expenses. 


The  distributing  or  pro-rating  of  Shop  and  Factory  expenses  upon 
the  cost  of  the  goods  produced  is  one  of  the  most  important  Ac- 
counting questions  a  manufacturer  will  be  called  upon  to  face. 
He  may  install  a  necessarily  complicated  system  by  which  some  manufac- 
turing expenses  are  pro-rated  on  the  L.  &  M.  cost  of  the  article  produced, 
some  on  the  value  of  productive  labor,  some  on  the  number  of  hours  used, 
and  some  on  the  value  of  a  given  machine,  the  length  of  time  it  is  worked, 
and  its  probable  life.  On  the  other  hand  he  may  decide  on  the  simpler 
plan  of  lumping  everything  in  General  Expenses,  and  providing  for  such 
expense  by  a  percentage  on  the  gross  direct  cost  of  output.  The  days 
when  the  latter  plan  could  be  safely  followed  are  past,  and  it  is  not  every 
concern  that  could  justify  by  the  results  obtained,  the  adoption  of  the 
former. 

Before  outlining  any  plan  I  would  like  to  call  attention  to  an  important 
point  which  I  think  is  frequently  overlooked.  There  is  a  general  impression 
that  it  is  a  safe  and  conservative  plan  to  advance  costs  of  product  sufficient 
to  cover  other  expenses  than  those  incurred  as  a  result  of  manufacturing. 
Some  firms  go  so  far  as  to  provide  for  selling  expenses  in  this  way,  so  as  to 
be  "on  the  safe  side."  In  the  case  of  a  concern  manufacturing  only  for 
customers  orders'  and  not  for  stock,  or  in  the  most  improbable  event  of  sell- 
ing each  year  all  product  of  such  year,  such  a  course,  though  wrong,  might 
not  be  dangerous.  In  the  case,  however,  of  the  company  manufacturing  and 
carrying  stock,  the  danger  of  such  a  course  is  not  limited  to  the  question  of 
wrong  costs.  It  goes  right  through  all  the  books,  affects  the  balance  sheet. 
and  results  in  an  inflated  and  misleading  statement  of  the  company's  assets. 
To  make  this  more  clear,  suppose  an  extreme  case,  using,  for  convenience, 
even  figures. 

25 


A  furniture  company  make  up  a  tabic  at  a  prime  cost  of 

Labor    $  5-°9 

Material    5-°° 


;i«  i.i  ,<> 


The  actual  expenses  incurred  by  the  factory  during  manufacturing  of 
this  article  are,  say  ioo  per  cent,  on  productive  labor,  thus  giving  an  actual 
cost  Ex.  Shops  of 

.  .  Labor    3  5-°° 

Material    5-°° 

Proportion  of  manufacturing  expenses 5.00 


15.00 


Suppose  the  firm's  expenses,  other  than  the  manufacturing,  arc  our  hall 
the  amount  of  what  may  be  correctly  called  Manufacturing  Expenses.  This 
table  would  be  charged  to  Stock  at  a  value  of 

Labor    $  5-oo 

Material    5-°° 

Proportion  of  expenses    7-5° 

Total     $17-50 

If  it  were  sold  before  the  end  of  the  year,  Stock  would  be  credited  and 
Sales  Account  charged  with-  this  value,  and  the  difference  between  this 
amount  and  the  selling  price  would  be  the  correct  profit,  so  that  the  error 
would  have  no  result. 

If,  however,  it  were  inventoried  at  this  figure,  the  assets  of  the  company 
would  show  $17.50,  composed  as  follows: 

Material    $  5-°° 

Wages    5°° 

Actual  increase  in  commercial  value  on  account  of  ex- 
penses which  would  be  incurred  to  replace  table 5.00 

Fictitious  increase  of  value  owing  to  expenses  incurred 

in  order  to  sell 2.50 


$17.50 

The  first  three  items  comprising  this  $17.50  are  legitimate  assets,  but 
the  folly  of  including  the  last  item  as  an  asset  is  evident  on  its  face.  As 
long  as  funds  held  out  or  credit  remained  good,  this  plan  liberally  carried 
out,  and  the  office  and  selling  expenses  figured  al  a  high  rate,  any  manufac- 
turing business  could  be  made  in  show  a  constant  increase  <d  assets,  quite 
■  tive  of  cither  sales  or  profits. 

The  distributing  of  manufacturing  expenses  as  a  percentage  on  the  L. 
&  M.  cosl  of  .-in  article  is  gradually  being  recognized  ;is  an  improper  pro- 
cedure, and  it  is  now  generally  admitted  that  the  greater  part,  if  not  all  of 
the  expenses,  should  be  distributed  in  proportion  to  the  productive  labor 

26 


expended.  Whether  the  amount  so  distributed  should  be  as  a  percentage  of 
the  value  of  labor,  or  at  a  rate  per  productive  hour,  is  not  so  easily  deter- 
mined.   The  advocates  of  each  plan  have  strong  arguments  in  their  favor. 

In  the  case  of  a  concern  using  very  expensive  machines,  which  from 
their  nature  must  lie  idle  a  large  part  of  the  time,  it  would  seem  as  though 
the  output  of  such  machine  should  bear  a  larger  proportion  of  "burden" 
than  the  output  of  a  cheaper  machine  being  used  regularly  eight  or  ten 
hours  per  day. 

Whatever  plan  is  decided  upon,  it  is  well  to  remember  that  the  value  or 
inefficiency  of  any  system  depends  largely  on  its  being  properly  introduced 
on  a  correct  basis. 

Inventories  of  Manufactured  Stores  and  Stock  should  be  taken  on 
sheets  so  ruled  as  to  admit  of  pricing  at  two  costs  and  extending  two  values. 
These  sheets  should  show  the  values  at  the  costs  in  use  based  on  the  old 
plan  of  pro-rating  expenses,  and  also  the  value  at  prices  obtained  by  taking 
the  L.  &  M.  cost  as  shown  by  the  orders  on  which  the  articles  were  manu- 
factured, and  adding  an  advance  thereto,  based  on  the  plan  it  shall  have 
been  determined  to  follow.  The  difference  between  these  values  must  be 
closed  out  to  Profit  and  Loss. 

Inventory  of  Work  in  progress  must  be  adjusted  on  the  same  lines,  but 
because  of  part  deliveries  to  Stores  or  Stock  on  account  of  uncompleted 
orders,  more  Work  would  be  necessitated,  and  the  greatest  care  required. 

Before  beginning  the  Inventory  of  Work  in  progress,  the  actual  un- 
completed orders  in  each  shop  should  be  compared  with  the  unfinished  or- 
ders, as  shown  by  the  office  records,  and  any  differences  adjusted.  A  state- 
ment should  then  be  made  at  costs  obtained  by  the  method  in  past  use. 

A  similar  statement  must  be  made  up  at  what  would  be  the  costs  and 
values  if  the  new  rates  had  been  used.  The  difference  must  then  be  closed 
out  to  Profit  and  Loss.  If  this  is  not  done,  and  the  rate  of  advance  is 
changed  without  providing  for  a  corresponding  change  in  the  values  at 
which  manufactured  stores  and  stock  stand  in  the  books,  correct  cost  of 
manufacture  cannot  be  secured.  Some  manufactured  stores  will  be  charged 
out  to  the  manufacturing  orders  at  a  value  which  includes  the  old  rate,  and 
some  at  a  value  including  the  new  rate  adopted. 

As  regards  stock,  if  values  at  which  it  stands  are  not  adjusted,  both 
sales  accounts  and  also  profit  on  sales  will  be  wrong. 

Changing  the  rate  of  advance  without  changing  inventory  value  of  both 
stores  and  stock  will  thus  render  inaccurate  and  unreliable  the  records  of 
costs ;  of  outputs  of  shops ;  of  cost  of  sales ;  of  profit  on  sales ;  and  at  the 
close  of  the  year  of  stores  and  stock  on  hand.  The  records  of  costs  of  out- 
put would  be  misleading  as  long  as  the  stores  continued  to  use  or  issue  any 
product  manufactured  prior  to  the  change ;  cost  of  sales  and  profit  on  sales 
as  long  as  any  stock  received  from  the  shops  before  the  change  was  charged 
to  sales  accounts,  and  the  inventories  would  not  be  accurate  until  such  time 
as  every  manufactured  article,  whether  stores  or  stock  possessed  by  the 
company  prior  to  the  change  had  been  disposed  of. 

Generally  speaking,  all  the  expenses  of  a  manfuacturing  company  may 
be  divided  into  the  following  classes : 

A.  Expenses  of  receiving,  keeping  and  handling  stores. 

B.  Expenses  incurred  as  a  direct  result  of  manufacturing  such  as  su- 
perintendence, production  of  power,  etc. 

27 


C.  Expenses  attributable  indirectly  to  manufacturing  at  factory,  rent 
(or  its  equivalent),  lighting  and  heating,  etc. 

D.  Expenses  of  receiving,  keeping  and  handling  stock. 

E.  Selling  expenses,  such  as  travelers'  expenses,  and  salaries,  commis- 
sions, etc. 

F.  Commercial  and  administrative  expenses  (many  items  as  salaries, 
insurance,  etc.,  will  have  to  be  distributed  amongst  these  expense  accounts.) 

A. — Expenses  of  receiving  and  handling  stores  should  be  provided  for 
by  a  percentage  advance  on  the  price  at  which  raw  material  is  charged  out 
and  credited  to  stores.  The  amount  provided  in  this  way  to  be  credited 
to  an  account  called  "Stores  Cost  Advance,"  which  should  be  sufficient  to 
cover  all  expenses  of  the  stores  department. 

B.  C. — Manufacturing  expenses,  both  direct  and  indirect,  should  be  pro- 
vided for  by  either  a  flat  rate  per  productive  hour,  or  a  percentage  on  pro- 
ductive labor,  as  determined.  The  amount  so  obtained  to  be  credited  to 
an  account  known  as  "Factory  Cost  Advance,"  and  the  credit  to  this  ac- 
count for  a  given  length  of  time  should  be  sufficient  to  cover  all  expenses 
properly  coming  under  either  of  these  heads  during  such  time. 

D.  E. — Stock  room  and  selling  expenses  are  to  be  provided  for  by  a 
percentage  advance  on  the  price  at  which  goods  are  credited  to  stock,  and 
charged  to  sales  account.  This  amount  to  be  credited  to  "Stock  Cost 
Advance,"  and  to  be  sufficient  to  cover  all  stock  room  and  selling  expenses. 

F. — All  expenses  other  than  the  above  are  charged  to  Profit  and  Loss, 
which  account  is,  of  course,  credited  to  the  profit  on  sales.  Sales  account 
will  thus  show  the  difference  between  actual  cost  of  goods  sold  and  the 
price  at  which  they  are  charged  to  customers,  or,  in  other  words,  the  actual 
"Profit  on  Sales,"  leaving  to  Profit  and  Loss  account  its  correct  function  of 
showing  the  net  profit  or  loss,  as  the  case  may  be. 

If  this  plan  is  adopted  on  a  very  careful  estimate,  based  on  the  records 
of  previous  years,  the  various  cost  advance  accounts  should  closely  balance 
with  the  expense  accounts  which  they  are  intended  to  cover.  Any  slight 
difference  should  be  adjusted  from  time  to  time,  not  directly  to  Profit  and 
Cost,  but  through  an  account  which  might  be  called  "Cost  Advance  Ad- 
justment Account,"  which  should  ultimately  be  closed  out  to  Profit  and 
Loss.  This  for  record  only,  in  order  to  ascertain  how  much  the  Cost  Ad- 
vance Account  may  exceed  or  fall  short  of  the  amount  required  to  offset 
expenses  they  ought  to  cover.  Absolutely  correct  rates  of  advance  could 
not  be  expected  for  the  first  year,  when  they  would,  necessarily,  be  largely 
based  on  estimates. 

In  most  manufacturing  concerns  advertising  should  be  treated  as  a 
selling  expense,  and  the  correct  proportion  charged  out  from  month  to 
month,  according  to  the  time  covered  by  the  contract  of  payment.  In  cer- 
tain cases  it  might  be  treated  as  an  investment,  to  be  credited  with  a  per- 
centage on  the  sales  which  it  causes.  This,  however,  comes  more  under 
the  scope  of  an  Article  on  Advertising  Systems  than  on  Manufacturing  Ac- 
counts. 

In  a  very  large  <on. cin,  instead  of  any  Factory  Cost  Advance  Account, 
there  should  be  one  for  each  producth  e  department,  based  niton  the  amount 
of  product,  and  tlir  expenses  of  each  lepart  meiit ,  and  a  proportion  of  gen- 
eral manufacturing  expenses. 

In  no  department  of  a  niaiinfaeti    ing    business   can    loose    papers    and 

28 


cards  be  used  to  greater  advantage  than  in  the  retail,  and  particularly 
is  this  the  case  when  the  actual  accounting  is  done  at  another  office.  Un- 
der such  circumstances  the  book-keeping  at  the  retail  office  resolves  itself 
into  promptly  forwarding  to  head  office  all  necessary  data  and  information 
—retaining  only  such  records  as  may  be  of  value  to  the  retail  management. 
A  retail  department  can  undoubtedly  be  operated  to  greater  advantage 
when  those  responsible  are  in  a  position  to  keep  a  close  watch  from  month 
to  month— not  alone  on  the  amount  of  sales,  but  also  on  the  amount  of  the 
purchases,  stock  on  hand  and  the  operating  and  maintenance  expenses,  and 
the  proportion  such  amounts  bear  to  one  another. 

In  the  following  pages  where  card  forms  are  given  "6x4"  is  assumed, 
unless  otherwise  specified.  The  size  adopted  should,  however,  as  a  general 
rule,  be  the  same  as  that  in  use  in  the  office  where  the  actual  accounting 
is  done. 

Such  lines  of  stock  as  require  close  watching  are  kept  track  of  by  one 
of  two  forms  of  Stock  Cards  (Forms  301,  302). 

Form  302  is  so  ruled  as  to  show  quantities  on  hand  at  certain  periods. 
It  is  used  for  such  goods  as  are  in  constant  and  fairly  regular  demand  and 
which  are  regularly  procured  from  a  source  which  it  is  known  can  supply 
them  in  a  given  length  of  time.  At  such  regular  intervals  as  may  be  found 
best  these  cards  are  taken  by  the  stock-keeper  and  the  stock  on  hand  noted 
thereon.  The  specimen  here  given  provides  for  weekly  reports  of  Oil  Cup 
No.  1018.    The  quantity  of  stock  being  noted,  the  cards  are  handed  to  the 


TI-IE.           /V) 

.  /=?.  a  a,     REz-nAii-  stock  carc 

€ 

X-* 

Glass    Oil     Cups        r»£     102,4.                             5el)^t___ 

hslo 

Qty 

N  0 

Oty. 

Mo 

CDiv 

Nio 

G>1y- 

No 

Oty 

Nl  0 

Oty 

M  0 

G>Ty 

rcrA 

/ 

' 

rv>r>d. 

FoT-m 

3ol 

Torn 

fond, 

fond. 

for>d 

fffrd, 

for>d. 

fS™d. 

manager,  who  examines  them,  and  referring  to  the  record  of  goods  on  order, 
governs  himself  as  seems  best. 

Form  301  shows  each  receipt  or  issue  of  the  article— the  former  in  black 
ink,  the  latter  in  red.  The  column  on  this  card  headed  "No."  is  used  to  in- 
dicate the  number  of  the  page  or  invoice  from  which  the  entry  is  made.  A 
list  is  kept  in  a  convenient  place  of  such  lines  of  stock  as  have  been  given 
stock  card  301,  and  salesmen  enter  such  articles  as  sold  or  received  in  a 
book  provided  for  that  purpose,  and  from  which  the  entries  are  made  on 
the  card. 

Occasional  city  purchases— i.  e.,  such  purchases  as  may  be  found  neces- 
sary from  time  to  time,  but  are  not  actual  purchases  for  stock,  are  made  by 
a  purchase  order  similar  to  Form  104,  and  the  accountant  is  authorized  to 
charge  the  retail  department  with  such  articles  by  means  of  a  Retail  De- 
partment Voucher  (Form  303).  These  vouchers— 6"x4"—  are  bound  in 
book  form,  numbered  in  duplicate.       They  are  written  out   with   carbon 


29 


paper— the  copy  is  a  card  and  is  perforated  for  removal,  and  transmission 
to  head  office,  and  is  the  accountant's  authority  for  all  charges  against  the 
retail  branch,  except  those  for  goods  supplied  direct  from  the  factory  or  ex- 
penditure- made  by  it  on  account  of  Retail  Department. 

These  vouchors  are  made  out,  their  number  noted  on  the  invoices  cov- 
ered by  them  and  sent  to  the  accountant  at  such  intervals  as  may  be  found 
most  satisfactory  and  convenient.  The  blank  column  on  the  right  hand 
side  of  this  Eorm  is  used  for  the  manager's  signature  on  the  card  which 


Tl-lS.   M.  R.  CO.  LTTO.    RETAIL.  ^>TOCK  CARD 

6x4 

.STOCKS      ON      HAND 

loie 

sS 

oil  at- 

Size 

)U^n. 

SJao 

lS<J.an. 

22,J.ar>J 

29jan. 

5f^b 

IS  Feb 

19  Feb 

£6  Feb 

A 

A 

A 

9, 

2. 

6 

5 

3' 

?>% 

6 

<r> 

<S 

5 

4 

4 

1 

A 

« 

2>, 

ft 

A 

lr> 

ir> 

IO 

s 

A 

A'/z 

&    J 

A- 

O 

<?> 

<s 

6 

e 

\ 

Farm 

300- 

goes  to  the  head  office — on  the  paper  copy  remaining  in  the  book  it  is  used 
to  carry  forward  the  total  amount  covered  by  vouchers  up  to  date.  This 
book  should  be  kept  indexed  up  to  date,  the  voucher  number  being  also  the 
page  number. 


THE  M.R.CO.L7TD.  RETAIL.  OEPT.     VOUCMEfiR 


Date Mo  J7 

"To  Accountant" 

Please  cr?ar>cie   oun    <a  c c o u  njs,     a*  follows 
Invoicoe     here-wrfe  (  Quali'ty,    price    ar?d  oTterf/ions     CoPPect". 

N'ame,    To    cr»e-.diT 

atocK 

Ek 

P 

Tofel 

Form  303 

Regular  stock  required  either  from  factory  or  other  sources  is  ordered 
by  means  of  aB  •  k  (  >rder  i  Form  304).    These  orders  are  pul  up  in 

pads  numb*  red  in  duplicate,  the  original  of  paper  and  the  copy-card.  The 
latter  is  filed  away  in  a  card  index,  classified  according  to  supplier's  name  or 
..Is  as  may  be  Found  best.  On  receipl  of  acknowledgement  of 
order  (no1  required  in  case  of  the  factory),  the  promised  date  of  shipment 
is  noted  on  the  card.     When  goods  are  ordered   Erom  other  sources  than  the 

,ry  the  seller  is  given  a  form  called  Retail  Debit  Note  (Form  305),  and 


::<) 


the  order  is  only  given  ji»  condition  that  this  form  is  filled  out  and  enclosed 
with  the  invoice  to  head  office. 

In  cases  where  goods  are  purchased  through  travelers  a  copy  of  the 
order  is  obtained  and  pasted  in  a  guard  book,  and  a  regular  purchase  order 
(Form  304)  is  made  out,  covering  "goods  as  per  copy  of  order  filed  in  Guard 
Book  No. page ." 

On  receipt  of  Form  305  with  invoice  by  head  office,  the  proportion  of 
charges  (freight,  duty,  etc.)  on  each  item  is  entered  in  the  proper  column, 
and  the  total  cost  extended.  The  debit  note  is  then  sent  to  Retail  Depart- 
ment, by  which  it  is  treated  as  an  invoice  from  Factory  for  the  gross  amount 
on  its  face.  It  is  not,  however,  charged  to  the  Retail  Department,  nor  the 
invoice  which  it  represents  passed  to  credit  of  supplier  until  certified  cor- 
rect by  a  Retail  Department   Voucher  (Form  303). 

When  the  goods  come  to  hand  the  debit  note  is  checked  and  the  Pur- 
chase Order  Cards  (Form  304)  removed  to  another  drawer  and  arranged 
according  to  goods. 

The  accountant  is  then  duly  authorized  by  Voucher  (Form  303)  to 
charge  Retail  Department  with  the  amount  of  invoice  and  charges  on  same 
as  shown  on  the  Debit  Note,  the  number  of  such  voucher  being  noted  on  its 
face.  It  is  then  filed  away  on  a  binder,  paged  and  indexed,  the  page  number 
being  noted  on  the  corresponding  Purchase  Order. 

It   will  be  seen  that  should  a  new   manager  be  called  upon   to  take 


RE.TAIL, 

&TOCK  ORDER 

?roc?c» 

fr>orn. 





No 

To   be. 
Shipped      V/.2>_- 

- 

-     - 

. 

Shipment 

pnorn 

i-S&d 

FOF1M    -30-4 

Dt-ir=>  1-1  GATE.   CAFiO 

OK*i- 

charge,  he  will  have  immediately  available  full  information  as  to  the  pur- 
chases of  his  predecessor.  The  Purchase  Order  Card  (Form  304)  will  show 
the  date  and  quantity  and  by  whom  supplied.  It  also  shows  the  Debit  Note 
number,  which  has  now  become  a  page  in  a  bound  book,  and  on  which  he 
will  find  an  exact  copy  of  invoice,  and  also  the  charges  to  lay  the  goods 
down  in  stock — in  other  words,  the  price  and  the  cost. 

If  information  regarding  small  city  purchases  should  be  required,  the 
indexes  of  the  duplicates  of  vouchers  issued  will  enable  him  to  supply  the 
head  office  with  the  date  and  name  of  supplier,  when  they  can  readily  look 
the  invoices  up.  The  original  of  the  retail  voucher  is  retained  by  head  of- 
fice and  filed  away  numerically.  It  will  thus  be  seen  that  any  desired 
change  for  stock  purchased  for  the  retail  department  can  be  at  once  looked 
up  from  either  name  of  article  or  supplier. 

Stock  sold  to  city  customers  or  to  Factory  is  entered  on  a  Charge  SHp 
(Form  306).  These  slips  are  numbered  consecutively  and  are  padded  with 
Delivery  Slips  (Form  307)  and  Receipts  (Form  308),  bearing  the  same 
number.    The  Delivery  Slip  is  of  tough  "flimsy"  so  that  by  using  "full"  car- 

31 


bon  the  three  forms  are  made  out  with  one  writing.  Reference  will  show 
that  Nos.  307  and  308  are  perforated  about  \y2"  from  the  left  hand  side. 
The  information  appearing  in  this  space  should  not  be  required  on  these 
forms.  This  plan  is  adopted  to  allow  the  filling  of  prices,  etc.,  on  the  Charge 
Slip  before  removing  the  forms  from  the  pad,  and  to  insure  all  charges 
reaching  the  invoice  clerk.  After  removal  this  portion  of  Delivery  Slip  and 
Receipt  is  detached  and  given  to  the  invoice  clerk,  and  are  retained  by  him 
until  the  original  charge  slip  has  been  priced  and  reaches  him,  when  he 
makes  the  entry,  noting  the  invoice  number  on  the  slip. 

The  delivery  slip  and  receipt  are  sent  out  with  the  goods,  the  one  to  be 
retained  by  customer,  the  other  signed,  brought  back  and  filed  away.  The 
charge  slip  goes  to  the  office. 

As  regards  shipment  to  out-of-town  customers,  a  Charge  Slip  (Form 
310)  with  a  "flimsy"  copy  and  a  Shipping  Advice  Note   (Form  309)   are 


R^TAiU 

3TOCH: 

OfZ/DEfZ? 

D<^r5__ 

_    _  _ 

_   _    _ 

r^o, 

—<2&&y 

To.. 

Please 

>ship  To  u 

&  *4-,_  _ 



_    as 

to\\o\/v£> 

5hi'p  i/'a 

<S<$d. 

cKaowledj^e  Thi&  oroen 

OLioYmty  <ib 

3ve*  No,  And •slS'fc  whrr}  you  m'/Zcrrtp, 

FORM     304          or-itpin^ 

1  paper'  @  X  -4. 

used.  Instead  of  being  padded  these  are  bound  in  a  book,  the  "flimsy"  re- 
maining, and  the  other  two  removed.  The  perforated  slip  removed  from 
the  advice  note  is  treated  as  the  slip  taken  off  the  Receipt  (Form  308),  viz.. 
as  a  check  against  omitting  to  make  a  charge  for  goods  shipped  or  delivered. 

The  Advice  Note  is  either  enclosed  with  the  invoice,  or  if  impossible 
to  forward  invoice  same  day  as  shipment,  it  is  mailed  by  itself.  In  case  of 
delay  in  getting  out  invoices,  this  gives  the  customer  prompt  advice  and 
full  particulars  of  shipment,  except  price,  and  enables  him  to  check  and 
stock  his  goods  immediately  on  receipt,  without  having  to  await  an  invoice. 

If  through  any  cause  a  charge  slip  fails  to  reach  the  invoice  clerk,  the 
slip  detached  from  the  receipt  form  or  shipping  advice  note  being  in  his 
possession  will,  by  its  number,  call  his  attention  to  the  face,  and  the  matter 
must  be  traced  up.  If  the  charge  slip  is  actually  lost,  a  duplicate  can  be 
obtained  by  referring  to  the  receipt  file,  or  to  the  flimsy  copy  of  shipping 
advice  note  hearing  the  required  number.  Tims  all  possibility  of  a  recorded 
shipmenl   no1  being  charged  is  eliminated. 

On  receipt  of  the  charge  slip  in  the  office  the  prices  and  values— both 
cost  and  selling— are  filled  in.    The  entry  is  then  made  in  a  loose  leal  day 

32 


book  by  means  of  which  invoice  and  day  book  entry  are  obtained  with  one 
writing".     The  invoice  number  is  noted  on  the  charge  slip,  which  is  then 


RZ.-TAIU     DE,F>'-r.     &£.£>!  T    Mo~TE^ 


TneM.R.Co.  Ltd, 

Gentlemen,  %      Dafe  ___-_  — 

We   b'lll     youfeday    on  <3ccT.   Retail     Dept  in  luDilmenT 

^fen  opden      No,_ cUTed.  --  - -, ~d&  Pen>   <^c!o^J 

^invoice,  Copy  oT  wKick    p!e.o<&e.  'find    beJow. 


Klo 


«ShiK>pe<J    V' 


"Youp&i^u! 


r- 


Copy    ^  !n> 


!i 


£± 


Cbcp^S". 


Tola 


•«=■.*»  blanK 


Reman>K: 


5:  «T 


filed  away  on  a  binder,  arranged  numerically  according  to  such  number,  the 
totals,  both  cost  and  selling  being  listed  from  day  to  day,  and  added  up  at 
the  end  of  the  month. 


aETAr/-.     DEP'T.    CM  ARC  £   *SL/f=>y  C  /TV 


Mo 

.Sold  +5. 


D^»t^ 


Add  i 


«S©!d   by ror»w<aPd<sd   t 


7~ 


ArHicJe 


roRM  3>oe> 


No 

~T&t*m& —   - 

RerT7<3r>Ke> 


In  v.  No. 


-h         ^oU 


ki> 


V«a.  !<_«. 


The  great  advantage  of  this  system  is  that  it  enables  the  head  office 
to  be  promptly  supplied  with  all  the  pages  of  the  day  book,  except  those  of 
the  current  day,  thus  keeping  the  posting  up  to  date,  without  the  constant 
sending  of  the  day  books  back  and  forth,  and  the  consequent  loss  of  time. 
At  the  same  time  if  a  customer  makes  any  inquiries  of  the  Retail  Depart- 
ment regarding  past  purchases  the  Charge  Slip  is  a  copy  of  the  day  book- 
entry,  and  can  be  at  once  looked  up,  either  by  invoice  number  or  by  date. 

All  accounts  being  payable  at  head  office,  the  handling  of  cash  by  Re- 
tail Department  is  a  small  matter.  The  simplest  way  is  to  keep  a  Petty 
Cash  Book,  and  forward  to  the  Accountant  a  daily  report  of  all  receipts  or 
disbursements  with  vouchers  for  the  latter,  taking  a  receipt  for  such  vouch- 
ers. The  entries  are  put  through  the  regular  cash  book  at  head  office  in  the 
usual  way.  At  the  close  of  the  month  the  accountant  is  notified  by  the 
manager  of  the  Retail  Department  of  the  total  cost  of  his  sales,  as  shown 


33 


by  the  binder  holding  charge  slips  for  the  month.     All  other  information 
required  by  the  accountant  for  the  proper  treatment  of  the  accounts  of  the 


CJEL-TAll—  DEPT      DEUVERY     -SL-in 


No 

M. 


Date_. 


Addne&£> — 


p^? ,..     'I 

Ple«sis>e  cecewe  as>  follow.£. ,  iq  ^ood    ondep  &rra    conartTcn.       lu 

'■& 

1  $ 
I  £ 

1    Q 


roat-i    •sot 
Ke.&P>     Tt-ti^      vS/—/^9 


Retail  Branch  is  cither  originally  in  the  possession  of  Head  Office,  or  has 
been  forwarded  from  the  Retail  Department  from  day  to  day  during  tin- 
month  on  the  lines  described — returns  from  customers  being  treated  on  the 


R^-TA/L.     DC&T.       CtCCC/^T    rOfk  GOOO^ 


No D«ate 

M. 


f3  <s  r=>. 

RECEIVED  iotfood   opder*  ae.  folic 


5/CW  >IN£)    RETURN     ~Trtl&    SL-I& 


ill. 


LO— 


INVOICE.  CJ-ERtf  TO  riOLD 
THIS  SUP  UNTIL,  ENTRV 
IS  MADE.  I  A/  DA  V  EioO*\ 


'e 

: 


same  systems  as  sales — "credits  for  goods  returned"  taking  the  place  of 
Charge  Slips,  and  a  loose  leaf  credit  book  that  of  the  day  book  already 
described. 

As  will  be  shown  later  the  accounting  system  used  provides  for  all  en- 
tries against  any  of  the  Retail  Department  Accounts  going  through  a  Trans- 
fer Entry  Book  instead  of  being  posted  directly  to  such  accounts  from  the 
various  books.  The  Cash  Book  alone  is  an  exception  to  this  rule.  At  the 
close  of  each  mouth  the  manager  of  the  Retail  Department  is  supplied  with 
a  copy  of  all  Transfer  entries  affecting  his  department,  including,  of  course, 
what  proportion  of  general  expenses  may  have  been  decided  upon,  and 
also  with  a  memorandum  of  all  cash  entries,  charging  or  crediting  any  of 
his  account-. 

For  his  own  information  and  guidance,  no1  as  a  matter  of  book-keeping, 
small  ledger  containing  the  following  accounts : 

R<  tail  Stock. 

Expenses. 
" 


34 


"       Returns  from  Sales. 

"       Revenue. 

"       Accounts  Collectible, 
and  what  few  others  may  be  required,  and  also  an  adjustment  account  called 
Head  Office. 

At  the  beginning  of  the  year  "Head  Office"  is  credited  and  Retail  Stock 
debited  with  the  amount  of  inventory.  From  month  to  month  as  the  Trans- 
fer Entries  are  received  from  the  accountant  they  are  posted  to  the  accounts 
in  this  ledger— Head  Office  representing  all  outside  persons,  except  cus- 
tomers to  whom  goods  have  been  sold.  Head  Office  Account  thus  represents 
the  total  purchases  of  the  Retail  Department.  Sales  Account  being  charged 
with  the  cost  of  stock  sold,  plus  a  percentage  sufficient  to  cover  expenses, 

^fHIPP/NG     y^DVICG         /VOTE- 


No Datf^ ^ 

m z~s_zrz         it 

Boxes.  — '  k 

e>b!^  ftck.d  ky —-l  i 

Oales,  Ckecked  by_ 1  jt 

vSh'.ppe.J   Via t| 


iNvo/ca  o-erh  rfOL-o 

SHIPPED       IN      aOOO        0*?0£f3     A>S    ]°£R .  I  TH/S^CIP    aHTH-CMC. 

0£TAtA.&     JGOve;  THE.  f~OLLOW/NO .  .mas ac£/v  e.nteri=.i-> 

1  lh/  DAY    SOOf+  , 


and  credited  with  the  price  charged  customer,  the  difference  will  represent 
actual  Profit  or  Loss — the  profit  or  loss  on  each  individual  sale  being 
shown. 

The  amount  of  percentage  added  to  cost  of  goods  sold  is  credited  to 
Retail  Revenue  Account,  and  should  be  sufficient  to  cover  all  expenses  in 
a  given  length  of  time.  Of  course,  it  cannot  be  gauged  exactly,  but  at 
close  of  year  all  expenses  are  closed  out  to  Revenue,  and  the  balance  of 
that  account  then  transferred  to  Profit  and  Loss.  As"  has  been  stated,  this 
plan  will  result  in  each  sale  standing  on  its  own  merits,  its  profit  or  loss 
being  shown  on  the  face  of  the  Charge  Slip  (From  306  and  310). 

At  the  close  of  each  month  a  statement  (Form  311)  is  taken  off.  A 
statement  is  also  made  on  the  same  form  showing  total  debits  and  credits 
from  the  first  of  the  year  up  to  date,  instead  of  the  monthly  totals.  A  series 
of  such  statements  for  even  one  year  will  give  most  valuable  guidance  for 
future  actions.  Their  value,  however,  can  be  greatly  increased  by  a  supple- 
mentary statement  showing  the  percentages  the  various  amounts  bear  to 
one  another.  A  close  watch  must  be  kept  upon  revenue  and  expense  ac- 
counts, to  see  that  the  rate  of  advance  at  which  stock  is  charged  out  to  sales 
is  neither  too  high  nor  too  low. 

I  know  that  many  managements  prefer  to  keep  as  much  as  possible 
such  details  as  expenses  and  profits  of  departmnts  even  from  the  manager 
of  such  department.    In  many  cases  they  do  so  to  their  own  injury.    A  man 

35 


competent  and  qualified  for  the  position  of  manager  of  the  Retail  Depart- 
ment should  possess  the  entire  confidence  of  his  employers  in  regard  to  that 

CHARGE.    SLIP  FOR   COUNTRY    ISf-tiPMENT 


o 

No D<*Tcr 

M«ame 

Adclpeis  _ 

Boxes 

BbU.                p^ckcd  by_  1. " 

Cr^fSe,                   cheoKed   ±y 

Shipped  Vi<3. 

Mo 

Ter>m& 

■Sol  a    by 

R<?mar&lv& — 

A«-ricM_e- 

oo-s-r 

«OL  D 

0 

Ppicc 

Value 

Ppico 

Value 

ropAf    s3/0 

department,  otherwise  he  is  only  nominally  manager.  To  use  best  judg- 
ment and  and  obtain  best  results  requires  fullest  information  as  to  the  out- 
come of  past  actions  along  the  same  lines  or  under  similar  conditions.     De- 

RETA/L.   DE-P'T.      STATE^METNT         MONTH  OF 


ood© 

Aocou  rtt      ' 

Monthly  Tcjfalfc 

6>a»is>n»c  g. 

Pieman  K>»Sr- 

Dp 

C  r=» 

D  r^ 

Or» 

Acafe.   Oo  H  , 
He^d   Office 

&/t 

cisions  proven  unwise  by  their  results  are  often  condemned,  in  the  light  of 
such  results,  as  poor  judgment,  when  in  reality  they  were  formed  upon  the 
soundest  possible  judgment,  in  view  of  the  limited  and  often  misleading  in- 
formatiin  upon  which  they  had  to  be  based.  K.  FALCONER. 


CHAPTER  IX. 
Electric  Manufacturing  Co. 

h  is  not  claimed  for  the  system  herein  described  that  it  is  perfect  in  all 
its  details,  nor  that  it  is  as  thorough  in  its  operation  as  a  more  elabor- 
ate system  might  be.  Nor  is  it  claimed  to  be  entirely  new  or  differenl 
from  other  plans  For  obtaining  factory  costs.  It  is  merely  the  result  of  an 
effort  to  adapt  features  of  other  systems  to  local  conditions  which  it  has 
occurred  to  the  writer  may  be  very  similar  to  those  confronting  other  read- 
ers of  The  Book-Keeper.  On  that  account  it  is  hoped  this  may  be  of  some 
interest. 

It  might  be  well  in  the  beginning  to  mention  some  of  the  conditions  for 
which  we  have  attempted  to  provide.  In  the  Factory  where  this  is  in  opera- 
tion we  manufacture  electric  dynamos  and  motors  and  have  a  line  of  about 

36 


thirty  different  sizes  of  frames,  on  each  of  which  is  built  machines  of  three 
standard  voltages  and  three  speeds  to  each  voltage.    The  limited  capacity 
of  the  factory  (employing  100  men)  makes  it  difficult  to  work  up  pan 
stock  on  such  a  large  line  of  machines,  most  of  the  work  being  done 
machine  is  sold.     Some  of  the  smaller  parts,  however,  are  made  in  quanti- 
ties, and  a  good  many  more  are  interchangeable,  being  used  on  machin 
different  sizes.    These  parts,  after  having  been  completed  for  one  order,  are 
liable  to  be  "stolen"  for  use  on  another.    In  addition  to  a  large  line  of  stan- 
dard machines  we  also  do  a  great  deal  of  special  and  repair  work,  and  make 
a  great  many  special  tools,  etc.,  for  our  own  use.     An  extensive  use  of  the 
apprentice  system  also  causes  labor  costs  to  vary,  as  a  handy  apprentice 
can  do  a  piece  of  work,  at  much  lower  cost  than  a  regular  workman  or  an  ap- 
prentice who  has  just  been  put  at  that  particular  work;  and  it  is  plain  that 
under  neither  of  these  conditions  alone  could  be  obtained  reliable  figures 
for  labor  costs. 

Besides  providing  for  these  and  other  conditions,  it  was  necessary  to 
arrange  a  system  that  could  be  taken  care  of  by  the  book-keeper  at  such 
times  as  could  be  spared  from  his  regular  work. 

The  first  step  taken  was  to  classify  and  number  the  different  parts  of 
the  various  machines.  In  doing  this  we  indicated  the  sizes  by  letters  and 
the  parts  by  numbers.  The  iron  and  steel  castings  which  are  the  principal 
parts,  were  given  the  first  numbers,  while  the  copper,  brass  and  bronze  cast- 
ings were  given  the  next  larger  numbers,  leaving,  of  course,  sufficient 
blanks  for  possible  changes  in  design  and  construction.  These  letters  and 
numbers  are  cast  on  the  parts.  Thus  "Ai"  is  the  base  for  smallest  size  ma- 
chine, "Br"  the  base  for  next  larger,  "A2"  the  frame  for  smallest  ma- 
chine, etc! 

For  machines  for  special  purposes  we  double  letters — thus  for  motors 
for  driving  printing  presses  "PA"  represents  the  smallest  size,  "PB"  the 
next  larger,  etc.  In  cases  where  more  than  one  pattern  is  used  for  any  one 
part,  those  not  standard  are  represented  by  adding  a  lower  case  lettr  to  the 
number  of  the  standard  part,  thus  "Ala"  is  a  special  base  for  the  smallest 
machines,  etc. 

Forgings  and  other  parts  which  cannot  have  numbers  cast  on  them  are 
given  still  higher  numbers,  thus  "A160"  is  the  shaft  for  smallest  machine, 
"B125"  is  500- volt  field'  winding  for  next  larger,  etc. 

Now,  for  recording  time  we  use  a  "Daily  Time  Ticket"  as  shown  in 
"Form  A."     Each  man  turns  in  one  of  these  tickets  every  day,  and  after  it 


Ho  13.          D-.ly  TlmeT.cWef. 

ORDER    HO. 

Pcj 

R«~*rlv5 

T,m« 

C-  3 

4 

<\ 

1-14^ 

ft/Cbrv     S\Oa   -HMfCJy 

1 

form  V                                                              *TVTil                                               |0"<U 

has  been  inspected  by  the  foreman  as  to  the  order  numbers  used  and  com- 
pared with  the  time  as  shown  by  the  automatic  time  reigster,  it  is  posted 


87 


to  cards  as  shown  by  "Form  B."  So  far  as  possible  all  time  is  charged  di- 
rectly to  the  part  on  which  labor  is  performed.  Assembling,  painting  and 
other  operations  of  like  character,  where  several  parts  are  involved,  each 
have  a  number  to  which  is  prefixed  the  letter  representing  the  size  of  ma- 
chine, thus  "A175"  is  assembling  smallest  machine.  For  special  and  repair 
jobs,  making  tools,  etc.,  arbitrary  shop  order  numbers  are  issued.  For  the 
various  "shop  expense"  items  such  as  repairs  on  tools  and  machinery, 
sweeping  and  cleaning,  etc.,  regular  standing  numbers  are  provided.  For 
each  of  these  various  parts,  operations,  special  and  standing  orders  a  "Form 
B"  card  is  filled  out  and  filed  under  index  cards  for  immediate  reference. 
Where  it  is  thought  desirable  to  know  the  cost  of  different  operations  this 
can  usually  be  determined  by  the  names  of  the  workmen,  as  shown  by  the 
card,  or  the  different  operations  may  be  represented  by  different  numbers. 
Where  one  is  sufficiently  familiar  with  the  rates  of  different  men  some  time 
may  be  saved  by  using  rates  instead  of  names  and  posting  together  all  time 
of  different  men  getting  the  same  wages. 

Besides  having  the  numbers  of  the  different  parts  indicated  on  the 
working  drawings,  complete  lists  of  sizes  and  parts  are  kept  posted  con- 
spicuously through  the  shop,  and  the  men  soon  become  thoroughly  familiar 
with  the  numbers.  This  lessens  the  risk  of  time  being  charged  to  wrong 
numbers,  as  is  so  apt  to  be  the  case  with  a  system  using  purely  arbitrary 
numbers  changing  with  every  order. 

An  ordinary  weekly  time  book  is  used  and  totals  posted  directly  from 
this  to  labor  account  until  the  close  of  the  month  (or  any  other  period  de- 
sired), when  the  totals  of  the  various  "expense"  items,  and  orders  for  new 
tools  and  other  additions  to  plant  and  equipment  for  the  month  as  shown 
by  Form  B  are  transferred  to  the  proper  accounts.  This  leaves  "labor"  ac- 
count showing  the  net  amount  paid  for  labor  which  is  charged  directly  on 
Form  B  to  either  part  or  operation  numbers  or  orders  for  special  repair 
work  (aside  from  those  items  that  pertain  directly  to  factory  equipment). 
In  other  words,  after  this  transfer  has  been  made,  labor  account  shows 
only  the  net  amount  of  "productive"  labor.    The  cards  for  special  and  repair 


H  u  njbe  r» 

43 

fc)*>c  r,  bTToiT. 

Wor-Kman. 

Twv* 

Tot»\ 

Rati 

fW7T 

l^^^- 

3  V 

T 

TL 

<l' 

5 

\<\% 

2X> 

a 

<\£ 

'"WW^J^^cr-. 

q 

U'4 

II  u 

xS 

L 

&\ 

i.  s^Xj 

uv 

5 

"\ 

^ 

\ 

3 

1 

3o« 

oS" 

\ 

5\ 

^CJUJU^.r^ 

u 

4 

a 

H 

4 

\0 

1*1 

X 

So 

Vh  oM^jx^ 

3 

1 

>-\. 

\ 

v^. 

H 

It 

05" 

1° 

f 

y 

y 

/ 

To-  ft 

Twl 

*l 

1 — 1 

\\ 

tl 

88 


work  are  removed  from  the  active  files  as  soon  as  completed,  while  those 
with  the  standing  numbers  for  expense  items,  as  noted  above,  are  renewed 
at  end  of  each  month. 

Now,  on  the  date  when  we  were  ready  to  put  this  plan  into  operation, 
we  took  a  complete  inventory  of  all  finished  parts  on  the  premises,— whether 
in  the  stock  room,  in  the  testing  room,  or  on  the  floor  of  the  machine  shop, 
whether  in  a  completed  machine  or  on  a  shelf  did  not  matter.  This  in- 
ventory was  taken  on  sheets  like  Form  C.  These  sheets  were  then  classified 
and  filed  for  future  use.  On  and  after  that  date,  as  explained  before,  all 
work  on  any  part  was  charged  by  the  workmen  to  the  number  representing 
that  part  and  posted  to  Form  B  at  the  convenience  of  the  book-keeper. 

Also  beginning  on  the  same  date  we  have  a  card  record  (Form  D)  of 


Labor 

Labor 

Labor 

P,rt 

fiVAti 

Date 

Co»t 

Date 

CeU 

Paf« 

Cost 

1 

3 

7  ,< 

7-y 

3> 

%7 

X 

^ 

v,s 

7,,.. 

3 

% 

m 

•%♦» 

JJr. 

iv 

4 

— . 

5 

7 

\ 

'7<o 

5a 

1 

f,i 

'I'- 

G 

it 

£>■ 

7 

- 

#i 

ll  i 

W^l*. 

9 

^M 

pf 

Ul 

fS 

^r 

^'7 

153 

— 

Ifeo 

4 

Ifl 

U 

162 

U 

no 

-. 

171 

L 

'4a 

"%ri 

17* 

3 

'%»* 

fernC 

machines  and  parts  sold.  This  is  compiled  from  the  sales  book  and  of  course 
does  not  include  parts  sent  out  to  replace  defective  work,  etc. 

Blanks  like  Form  E  are  also  filled  out  regularly  covering  periods  of  one, 
six  and  twelve  months.  Besides  being  interesting  as  comparisons  of  differ- 
ent periods  this  form  gives  us  the  per  cent  or  proportion  to  add  to  net  labor 
costs  for  expense. 

The  method  of  obtaining  labor  costs  from  the  equipment  we  have  now 
gathered  together  can  best  be  made  plain  by  an  illustration. 

Suppose  the  plan  has  been  in  operation  four  months  and  it  is  desired 
to  know  the  labor  cost  of  "C3"  for  that  period.  The  stock-keeper  or  fore- 
man reports  eight  of  these  finished  in  stock.  (By  in  stock  we  mean  all  that 
can  be  found  in  the  premises,  whether  in  the  stock  room  or  elsewhere).  Our 
first  inventory  shows  two  of  these  on  hand,  while  our  Form  D  record  of 
sales  shows  that  sixteen  have  been  sold  in  the  interval.    This  indicates  that 


39 


twenty-two  have  been  finished  in  the  period  covered  and  on  figuring  Form 
B  for'the  same  period  we  find  they  have  cost  $11.67/ or  $-53  apiece.  This 
result  is  then  recorded  on  Form  C  as  indicated,  and  when  at  any  future 
time  it  is  desired  to  obtain  new  figures  on  this  part  it  can  be  done  in  the 
same  way  and  an  average  obtained  either  from  the  date  of  the  original  in- 
ventory or  date  of  last  figures.  Thus  if  on  a  later  date  we  ascertain  that 
there  arc  nine  on  hand,  and  our  record  of  sales  shows  that  twenty  have  been 


DiSBURS£nenT5  j^i-^*-^ 

PUhVN? 

q\.»^pme(\\ 

IfVl 

TocU       1 

Si"* 

1  0 

T.*U«,^ 

P^tWn* 

j  u5 

7* 

Omw^^N^IWC,) 

7  vl 

1  * 

111! 

1  1 

7!K,y    E 

ipen&e 

£n«,-,atUom 

\>,V<1 

1  V 

StuOf.'N  fWluHX 

»^v 

Ina 

Reyu  n«.\,. 

1    IV 

|0 

Too\°> 

3i  x. 

V     O 

OtV^r  L«W<- 

0|b 

■)  V 

TA\*,c 

1  <*S 

--» 

4<\t»S 

5  S 

Cleal    I 

|M?e«*«. 

Re,r 

v» 

XSSo 

0^-«  EfV« 

bOo 

>  -; 

Fre'ufll* 

T  vq 

1  S 

U»(.«»ei 

xss 

Tr„v    EM. 

HJO 

,  < 

Comm.5»'.On 

345 

11 

lt&V«rt'.t..|<f 

bS9 

1  i 

M>6o 

3x<i 

to 

fcltn 

4-> 

L3b< 

141-^ 

'7 

f.^t 

sold,  it  is  evident  that  five  have  been  finished  since  date  of  last  figures,  or 
twenty-seven  since  original  inventory.  Form  B  shows  the  labor  for  this 
last  period  to  be  $3.18,  or  $0.63^2  apiece,  while  the  cost  for  the  twenty-seven 
would  be  $14.85,  or  $0.55  apiece. 

When  total  cost  of  a  given  machine  is  required,  it  is  readily  obtained 
by  adding  to  the  sum  of  the  costs  of  the  various  parts  the  cost  of  erecting, 
painting  and  similar  operations  as  found  by  the  same  method. 

For  convenience  in  recording  results  and  obtaining  totals  and  com- 
parisons  of  different  periods  we  use  a  card  like  Form  E,  one  of  these  being 
Idled  out  for  each  part  and  the  whole  group  properly  classified  and  indexed 
for  reference.  Where  a  part  is  used  in  more  than  one  machine  its  card  is 
under  the  machine  for  which  originally  intended  and  a  plain  card  of  a 
different  color  is  placed  in  its  stead  under  each  of  the  other  headings.  These 
plain  lain  only  memorandums  referring  to  the  location  of  the  or- 

iginal card.  At  the  end  of  each  group  or  .machine  is  placed  a  "Miscel- 
laneous" card,  giving  a  list  of  material  used  on  that  machine  not  covered  by 


Ki 


the  regular  cards, — such  as  screws,  bolts,  paint,  boxing  and  packing  ma- 
terial, etc.  The  last  card  in  the  group  is  a  "Recapitualtion"  card  like  "Form 
G."    This  form  is  self-explanatory  and  is  filled  out  as  often  as  changes  in 


frame. 

Jb 

<<ov    vvov.  5oo s/ 

\vo       Vvd    bOO 

!^™lp^- 

b  an 

teb 

Mcv, 

Av>r 

\ 

v 

\ 

\  -   UOVair  SS>  Oa-^-oJ^-^- 

rAav 

a 

J)  urve 

3 

\     . 

a.  -C^^xu^c, 

>uW 

4 

JW^ 

\ 

^ 

|    M^c^_ 

5i^r. 

Ocv 

rw 

Occ 

-NoVaV 

form   O 

price  of  material,  design  of  machine,  methods  of  operation  or  the  desires  of 
the  firm  may  necessitate,  the  old  cards,  of  course,  being  preserved  for  com- 
parison when  new  are  filled  out. 

The  per  cent  added  to  labor  footing  on  Form  G  is  of  course  obtained 


p«w.rto  q-]5 

r\a<Le\or              ^J^     -WVoXW 

outtr.rlo  <%» 

IJl^eo.  a.\so  oa   l^-'j,  »»       »» 

Tool  fioii.    (,j 

2-V 

■ 

Mater.il  Q,  .^_. 

Uabor 

R-Craa.rVC5) 

Gvs>.Wei4it  » 

*|,'o.    53 

B»e.                0^ 

*f.s°<     55 

CoA"        l*U 

Wraw  ^  o<5 

Labor 

ToU\ 

fofw  r '. 

41 


from  Form  E  for  the  same  period.  I  presume  there  will  be  some  of  the 
readers  of  The  Book-Keeper  who  will  criticise  this,  because  no  distinction 
is  made  between  "general"  and  "selling"  expense.  It  is  hard  for  us  to  make 
this  distinction,  as  we  have  no  regularly  organized  sales  department,  this 


tt»m.e      .y 

^"^Vvlvte   ^oVY^W- 

Wt 

?<•- 

Materval 

Lstor 

ToVa\ 

\  tvoxv     CoufcVwv  <S,5 

**  5 

o> 

\ 

3  b" 

7- 

•4jT 

^v«uuo^> 

■1 

yc 

^0 

i 

\    V 

ftvOs.& 

''v 

v4 

iU 

J£ 

"p^vwvoW^    Corv 

5 

"bH>° 

"5 

1 

m 

&Aw*V\~ 

05 

\  \ 

*■'          C^ovto 

\ 

CM 

\ 

iv 

^ottmvu^AVu    QiaAA^ 

\ 

^? 

\        t 

l?3 

1A/XAS 

af> 

5 

FaaXX-     Coi^*/ 

b<? 

JV 

CoU*' 

M 

\  0 

i 

0? 

$,Wu*»,W\> 

3 

?o 

FaxAXs-'ixUV 

♦ 

\  2> 

bl 

TK^waX)  %<  IA^»fi- 

t- 

7o 

(, 

vv 

~ \V\&\ 

16 

^1 

17 

03 

5W>v>EfV>         5S^ 

s 

qfo 

aen\     "              ^1.° 

% 

l  7 

OeV>^Moa1c  c^° 

1 

«  t 

48 

f4 

Foc-rrx   CX  . 

part  of  the  business  being  attended  to  largely  by  the  officers  of  the  com- 
pany in  connection  with  their  other  duties.  However,  where  conditions 
will  permit,  the  system  can  easily  be  adjusted  to  make  the  distinction  be- 
tween these  two  items.  The  last  item  on  Form  G,  "Depreciation  and  Bad 
Accounts,"  is  figured  on  the  basis  of  the  record  for  the  previous  year  and 
is  added  more  as  a  memorandum  to  comply  with  the  desires  of  the  firm 
that  the  card  show  the  complete  and  total  cost  of  marketing  the  machine 
and  handling  the  account. 

It  will  be  noticed  that  this  system  is  based  on  averages  all  the  way 
through,  and  that  the  labor  on  parts  that  are  junked  after  being  partly  com- 
pleted, because  of  defective  work  or  material,  is  automatically  pro  rated  and 
added  to  cost  of  parts  that  are  used.  We  also  find  we  get  the  time  more 
correctly  recorded  and  at  a  great  deal  less  expense  than  under  the  system 
of  issuing  arbitrary  shop-order  numbers,  as  the  men  nearly  always  have 
the  numbers  before  them  on  the  drawing  and  casting,  and  in  other  cases 
each  man  has  only  a  few  numbers  to  remember,  and  they  do  not  change. 
Besides  being  more  accurate,  this  saves  very  much  time  both  for  the  men 
and  for  the  foreman,  and  also  removes  the  temptation  to  "load"  the  time 
onto  the  general  numbers  in  order  to  cover  up  defective  work  or  forgotten 
numbers. 

Another  feature  of  this  system  thai  will  commend  itself  in  a  great  many 
cases  is  that  fact  that  the  work  can  be  kepi  up  at  one's  convenience.  Afer 
the  Daily  Time  Tickets  have  been  compared  with  the  time  register  and 
checked  off  to  see  thai  all  are  turned  in,  they  need  not  be  posted  until  it  is 


12 


found  convenient,  and  if  there  is  not  time  enough  to  attend  to  the  whole 
system,  part  can  be  left  out  without  detracting  from  the  value  or  correct- 
ness of' the  part  kept  up.  For  instance,  if  one  or  two  machines  or  lines  are 
thought  sufficient  and  satisfactory,  the  time  spent  on  that  portion  of  the 
work  need  not  be  posted. 

As  intimated  in  the  beginning,  we  believe  the  principles  of  this  system 
can  be  adapted  to  other  lines  of  manufacturing  where  similar  conditions  are 
to  be  met  with  the  same  satisfactory  results  we  have  experienced. 

A.  C.  WARD. 


CHAPTER  X. 
Cost  Cards. 

The  intention  of  this  article  is  not  to  outline  a  specific  system  for  as- 
certaining exact  factory  costs.  . 

Instead  it  simply  suggests  a  general  plan  for  such  a  system  and  is 
rather  an  exposition  of  the  superiority  of  card  systems  over  books  for  this 
particular  form  of  accounting. 

So  broad  and  general  is  the  suggested  plan  that  modifications  and  ad- 
ditions must  be  made  to  fit  it  for  any  business  adopting  it. 


/'slfveos    4i»cn   \ 

<w""r'fJC' 

rMrOf~.T.W                   |                              ..7- -T7  .-..»<  ~K                           IIJI 

11  ijd  5—pa.w.-  % 

TOT7.l..««..  C^' 

The  principle  of  the  system  is  the  accumulation  on  cards  as  shown  in 
Figure  2  of  the  cost  of  various  operations  by  parts.  Then  on  cards  similar 
to  those  shown  in  Figure  1  the  totals  of  the  former  cards  are  assembled 
and  the  fixed  expenses  added. 

The  reader  will  note  that  the  cards  shown  in  Figure  2  are  filled  out  with 
only  the  operations  entering  into  the  manufacture  of  the  certain  parts  rep- 
resented by  the  card.  In  an  ordinary  bsuiness  it  is  of  greater  convenience 
to  write  the  names  of  the  various  operations  than  to  have  their  names  or 
numbers  printed,  for  the  operations  on  the  different  parts  vary  to  such  an 
extent  that  many  different  forms  would  be  required. 

The  details  of  cost  may  be  further  divided,  especially  in  computing 
costs  of  large  and  special  machinery;  by  allowing  a  card  for  each  operation 
and  carrying  the  totals  to  the  "part"  cards  (Figure  2).  These  "operation 
cards  may  be  filled  out  direct  by  the  workman  and  are  made  of  cheap  but 
durable  material.  If  a  satisfactory  system  of  collecting  items  of  cost  from 
the  workmen  is  already  in  use,  the  "operation"  cards  may  be  omitted  and 


13 


the  data  for  the  "part"  cards  secured  from  the  ordinary  sources  or  from 
Foremen's  estimates. 

The  greatest  gain  in  arranging  costs  on  cards  in  place  of  books  is  the 
case  with  which  changes  can  be  made.  For  instance,  if  the  metal  is  changed 
in  character  or  weight,  the  time  required  for  the  operation  is  lessened,  or 
any  oilier  change  occurs  to  effect  the  cost  of  the  part,  only  the  card  repre- 
senting that  part  is  changed  and  this  is  simply  removed  from  the  file  and  re- 
placed by  a  corrected  card. 

For  this  reason  the  cost  records  are  always  complete  and  up-to-date. 

In  ease  any  operation  or  part  or  article  is  abandoned,  it  is  very  simple 
to  remove  the  proper  cards  and  place  them  in  a  transfer  file  or  destroy  them 
entirely.  From  the  old  cards,  provided  they  are  transferred,  calculations 
can  be  made  of  great  assistance  in  the  conduct  of  the  shop. 

Cards  are  preferable  to  books  for  still  another  reason — the  ease  with 
which  the  card  representing  any  article  or  part  may  be  found.  By  means  of 
guide  cards  the  record  cards  are  so  arranged  that  any  one  desired  may  be 
found  instantly. 

The  y2  cut  guide  cards  make  divisions  of  the  principal  classes,  and  each 
class  is  further  subdivided  into  specific  articles  or  sizes  by  means  of  l/2  cut 
guide  cards  and  into  the  various  parts  themeselves  by  means  of  l/2  cut  guide 
cards.     Different  parts  are  sometimes  designated  by  number. 

The  record  cards  representing  the  articles  are  of  a  different  color  from 
these  representing  the  parts,  and  in  case  record  cards  are  also  used  for 
records  of  operations  these  cards  are  of  still  another  color.  The  superin- 
tendent or  any  other  interested  person  loses  no  time  in  consulting  the  files. 

When  the  card  plan  is  used  there  is  no  limit  to  the  growth  of  the  sys- 
tem. In  a  growing  manufacturing  concern  a  book  soon  becomes  useless 
because  it  is  filled  with  old  and  dead  records  which  cannot  be  removed. 


Then  it  is  necessary  to  recopy  the  live  records  and  plan  a  larger  book.  In  a 
itter  without  limit  may  be  inserted  in  its  proper  location 
without  disturbing  the  present  records. 

To  a  particularly  careful  management  desirous  or  exhaustive  records 
and  of  exact  summaries,  the  cards  are  especially  suited.  Each  card  being 
a  unit  of  record,  it  may  be  changed  from  place  to  place  in  the  index,  thus 
furnishing  the  same  information  in  different  connections.  For  instance,  the 
cards  may  be  filed  by  dates  and  thus  represenl  the  total  amount  of  work 
done  in  the  shop  in  a  definite  interval. 


II 


When  this  interval  is  completed  the  totals  of  all  the  cards  may  be  taken 
and  the  cards  themselves  refiled  through  the  regular  index  outlined  above 
to  again  yield  up  their  information  in  a  different  connection. 

The  economy  of  a  card  system  is  such  that  the  entire  cost  is  more  than 
covered  by  the  saving  in  clerical  labor. 

This  is  more  particularly  demonstrated  when  a  shop  has  been  in  the 
habit  of  paying  overtime  for  accumulating  similar  records  with  cumber- 
some book  systems.  With  the  book  system  the  work  must  be  kept  up  even- 
ly in  dull  and  busy  times,  but  with  the  card  system  the  records  can  be  made 
during  the  busy  time  and  the  cards  arranged  and  the  summaries  drawn  up 
in  the  slack  season.  A.  W.  SHAW. 


C^H&Qi^ 


45 


PART  IV. 


Municipal  Accounting. 


Specification  for  Municipal  Balance  Sheet* 


CHAPTER  I. 

IN  THE  specification  on  this  page  will  be  found  an  analysis  and  classifi- 
cation of  the  several  items  which  enter  into  the  accounts  of  the  aver- 
age municipality ;  and  if  followed  in  principle,  the  treasurer  will  be  en- 
abled at  all  times  to  furnish  a  complete  and  satisfactory  presentation  of  the 
standing  of  the  corporation.  The  analysis  of  accounts  which  is  herewith 
presented  in  chart  form,  is  that  which  is  required  where  the  balance  sheet 
is  made  an  integral  part  of  the  system  of  book-keeping. 


Specification  for  Municipal  Balance  Sheet, 

Analysis  and  Classification. 

Revenues  and  Disbursements. 

Assets  and  Liabilities- 

ORDINARY. 

Cash  in  Bank 

Cash  on  hand   and  in  Bang 

Taie,    {     Current 

Ta».ea.  divided  as  to  rears 

Water-Rates""" 

Schools,  divided  as  lo  Public    Hlgb  sod  Separate 

Lightkates 

Electric  Light 

Advances.  Public  Works  In  progress 

Advances,  Local  Improvements  in  progress 

Revenue .... 

Floes  and  Pees 
Other  Sources 

„                           l     Sinking  Fund.  General 

RESERVE (     Sinking  Fund.  Local  Improvements 

I     Special  Trust  Funds 

extraordinary: 

NECESSARY    INVESTMENTS. 

debentures    Genera! 

SlnklM  Pond1"0"'    '""'""■''""" 

Ele'c'ric0LlgMV!'ys7eni 

Sinking  Fund  Interest 

Assets.... 

Fire  Halls  and  Appatatu. 

School  Buildings  and  Equipments 

ORDINARY  . 

Fixed 

City  Hall  and  Furniture 
Public  Library 
Public   Park 

Hospital 

Grants  and  Charities 

Public  Works  Equipment 

Other  necessary  Investments 

Fire 

Administration  ol  Justice 

SPECULATIVE    INVESTMENTS. 

Health 

Stock  in  Railway- 

Tarka 

Stock  in  Gravel  RoacrCoropanfea 

Market 

Expenditure 

Schools,  divided  as  to  Public    High  and  Separate 
Printing-  Advertising  and  Stationery 

Passive 1    gj™™,,,. 

Rebates  and  Allosvancca 

Contingencies 

Other  sources 

/     liONnRD  1     Debeuturea.  General 

extraordinary: 

\     Debentures,  Local  Improvement 

DebJniifrer'General 

J      Debentures,  due  and  unpaid 
[     Coupons,  due  and  unpitd 

FLOATING       J     Uoans.   Cnrrent 

i  l^.»             ...  ^      Loaps.  Local  Improvement.  In  progress 

Debentures.  Local   improvement 

lotereet-Geoeral  Debentures 

Liabilities 

1     Accounts  payable 

Public  Works  In  progress 

titbit  'nar'°r'°"°"  '"  """"" 

Capital. J    s«n>iu.  of  Assets  over  Lia.biii.iea 

Designed  by  F   II.  Macpherson.  C-  A. 

It  must  be  remembered  that  in  the  description  of  any  model  or  system, 
it  is  essentially  necessary  to  include  more  in  items  and  detail  than  will  be 
found  requisite  in  any  one  municipality.  If  the  illustration  is  to  be  of  any 
service  it  must  of  necessity  be  exhaustive  and  complete  in  all  its  details, 
local   conditions  governing  as  to  selection  in  individual   cases. 


ASSETS. 
The  assets  are  again  subdivided  into  four  classes- 
and  passive. 


-active,  reserve,  fixed, 


Active  assets  comprise  cash,  which  includes  the  amounts  in  the  treas- 
urer's hands,  and  the  balances  due  from  the  bank  on  account  current;  taxes 
current,  outstanding;  tax  arrears,  outstanding;  water  rates;  electric  light 
rates ;  rents ;  advances  on  account  of  permanent  public  works  or  local 
improvements ;  and  miscellaneous. 

Reserve  assets  include  sinking  funds  on  general,  or  local  improvement 
accounts,  and  other  specially  invested  funds. 

Fixed  assets  are  subdivided  under  two  heads,  viz:  necessary  invest- 
ments, and  speculative  investments.  The  first  includes  all  permanent  in- 
vestments, as  waterworks  system;  electric  light  system;  fire  hall  and  ap- 
paratus ;  market ;  school  buildings  and  equipments ;  city  hall  and  furniture ; 
public  library;  parks;  real  estate;  public  works  equipment;  and  other  in- 
vestments of  a  like  nature.  The  second  includes  stock  held  in  railway  or 
gravel  road  companies,  or  such  other  enterprises  of  a  public  nature  as  are 
permitted  by  statute. 

Passive  assets  represent  investments  which,  while  somewhat  perma- 
nent in  character,  are  intended  to  be  written  off  as  the  debentures  issued  to 
cover  the  cost  thereof  are  redeemed ;  the  life  of  the  work  and  of  the  deben- 
tures intending  to  be  concurrent.  In  this  class  is  also  included  the  item 
of  local  improvements,  of  an  amount  equal  to  the  debenture  indebtedness 
outstanding  on  that  account,  an  annual  reduction  being  made,  equivalent  to 
the  yearly  redemption  of  debentures.  Advances  by  way  of  bonus  also  come 
under  this  head,  the  amount  to  be  written  off  annually  running  concurrent- 
ly with  the  retirement  of  the  debentures  which  produced  the  original 
amount  of  the  bonus ;  in  cases  where  certain  conditions,  as,  for  instance, 
the  employment  of  a  certain  amount  of  labor,  are  involved,  then  the  sum  to 
be  written  off  annually  will  depend  on  the  extent  to  which  the  stipulations 
upon  which  the  granting  of  the  bonus  was  based,  have  been  fulfilled. 

LIABILITIES. 

The  second  division  of  the  balance  sheet — the  liabilities — is  divided 
into  three  classes,  viz:  bonded,  floating,  and  capital. 

Bonded  liabilities  is  subdivided  under  two  heads,  (i)  debentures,  gen- 
eral, and  (2)  debentures  issued  on  account  of  local  improvements,  this  lat- 
ter being  a  direct  liability,  but  secured  by  collateral. 

Floating  liabilities  comprise  debentures  due  and  unpaid,  coupons  due 
and  unpaid,  loans  current,  loans  on  local  improvements  in  progress,  and 
accounts  payable. 

Capital  liability  represents  simply  the  surplus  of  assets  over  liabilities. 

REVENUES. 

The  municipal  revenues  for  each  year  consist  of  the  debts  accruing  due 
by  levy  or  otherwise  from  all  and  sunudry  to  the  corporation,  although 
these  may  not  necessarily  be  collected  within  the  period.  Land  taxes,  water 
rates,  electric  light  rates,  licenses,  school  grants,  and  fines  and  fees,  form 
the  ordinary  sources  of  revenue ;  while  the  extraordinary  revenues  are  de- 
rived from  sale  of  debentures,  temporary  loans,  sale  of  public  property, 
franchises,  and  the  like. 

The  details  of  the  various  sources  of  revenue  having  been  ascertained, 
they  should  at  once  be  made  a  matter  of  record,  in  books  especially  designed 
for  the  purpose,  with  such  accompanying  particulars  as  will,  either  at  the 
present  or  in  the  future,  give  all  needed  information.  These  records  are  in 
the  form  of  registers  or  rolls,  as  the  tax  roll,  water  rate  roll,  electric  light 


roll,  license  register,  market  fees  register,  and  such  other  hooks  as  are  found 
to  be  necessary  or  convenient  to  cover  the  various  forms  or  sourcs  of  reve- 
nue- All  these  registers  or  rolls  should  be  susceptible  of  proof  as  to  clerical 
correctness  within  themselves,  the  better  plan  being  by  the  use  of  the 
columnar  system  of  debits  and  credits.  Accounts  for  each  roll  should  find 
a  place  in  the  general  ledger,  the  sum  of  the  debits  being  entered  at  one 
operation.  The  counterbalancing  entry  will  be  to  the  credit  of  "revenue 
account."  After  the  credits,  in  the  form  of  collections,  rebates,  allowances, 
etc.,  are  entered,  the  balances  will  represent  the  amounts  appearing  opposite 
the  various  items  in  th  statement  of  assets,  and  should  agree  in  each  case 
with  the  amount  of  the  outstandings  appearing  in  the  various  rolls. 

EXPENDITURES. 

Ordinary  expenditures  are  such  as  are  incurred  in  the  daily  conduct 
and  maintenance  of  municipal  government,  otherwise  called  operating  ex- 
penses. The  extraordinary  expenses  are  in  the  nature  of  the  redemption  of 
debentures,  and  payment  of  interest  thereon,  repayment  of  temporary 
loans,  construction  of  permanent  buildings  or  other  works,  purchases  of 
real  estate,  and  so  forth.  The  expenditures  of  a  municipal  corporation  for 
a  given  year,  are  the  debts  contracted  by  the  corporation  within  the  par- 
ticular period,  even  though  they  may  not  have  been  satisfied  by  payment. 
It  is  safe  to  say  that  while  in  the  average  municipality,  the  revenues  will  be 
exhibited  at  their  true  value  in  the  financial  statement  for  the  year,  the  ex- 
penditures will  be  found  to  be  rarely  so.  The  desire  of  the  representatives 
of  the  ratepayers  to  show  a  surplus  by  omitting,  often  by  deliberate  design, 
to  include  in  the  expenditures  debts  contracted  but  unpaid,  is  the  rule  and 
not  the  exception.  If  a  true  and  faithful  statement  is  to  be  presented,  all 
the  accounts  for  debts  contracted  within  the  period  should  be  passed  by  the 
council,  and,  if  immediate  payment  is  not  possible,  carried  by  the  treasurer 
to  the  credit  of  the  individuals,  the  debits  being  made  to  the  proper  ac- 
counts of  expenditure.  These  debts  will  then  be  recorded  as  ledger  liabili- 
ties, and  will  appear  in  the  balance  sheet  as  such,  and  the  expenditures  of 
the  year  will  present  a  true  statement  of  the  condition  of  affairs. 


CHAPTER  II. 
The  Cash  Book. 


The  book  of  prime  importance  in  all  municipal  accounting  is  the  cash 
book.  Other  books  of  account  are  necessary  and  requisite,  but  the  cash 
book  is  the  central  figure  of  the  group — the  final  results  culminating  in  the 
ledger  entries.  In  many  rural  municipalities  the  cash  book  is  practicallv 
the  only  one  kept  by  the  Treasurer,  and  the  periodical  analysis  of  the  ac- 
counts falls  generally  to  the  auditors.  As  is  well  known,  these  officials 
have  even  a  less  intimate  knowledge  of  the  affairs  of  the  corporation,  than 
the  treasurer,  the  result  being  that  "confusion  worse  confounded"  is  the 
order  of  the  day.  In  the  province  of  Ontario  considerable  progress  has 
been  made  along  the  line  of  an  improvment  in  this  dirction,  by  the  introduc- 
tion of  a  uniform  system  of  cash  account,  the  use  of  which  has  been  com- 
pulsory. In  the  system  adopted  by  the  Legislature — and  designed  for  use 
in  rural  municipalities,  villages,  towns,  and  cities  having  less  than  15,000 
population — the  main  considerations  sought  have  been  simplicity  and  cor- 
rectness— with  a  minimum  of  labor,  the  completed  result  being  an  abstract 
statement  of  receipts  and  expenditures  fairly  well  analyzed. 


In  the  illustration  given  herewith,  is  found  the  form  for  counties,  the 
ruling  being  practically  the  same  for  city,  town,  village  and  township  ac- 
counts, changes  in  the  headings  being  made  to  suit  the  different  require- 
ments. The  opening  entries  in  the  illustration  give  the  balance  on  hand 
and  in  the  bank,  these  being  carried  to  the  total  column.  The  various  re- 
ceipts have  their  various  columns,  and  the  additions  to  the  total  column 
exhibit  with  each  entry  the  whole  amount  of  income  from  all  sources,  while 
the  additions  of  the  individual  columns  gives  the  exact  receipts  in  each  de- 
partment of  the  accounts.  The  balance  in  the  bank  account  is  also  carried 
continuously.  Distribution  of  the  payments  is  made  as  the  charges  are  en- 
tered, the  gross  payments  being  carried  in  the  total  column.     The  correct- 


Do 

Ccpor. 

atfi ., , 

of    DSfe 

Co 

urtf? 

of     _ 

D<stt 

Name,  and  CtMfculopw» 

«^J-r 

C 

_=e>K           D 

-  <=  c  ,  pT 

No 

lTZ\ 

L.«.«« 

-.  i    .,;. 

o?r 

'_' 

' '  £.'; 

'.."'.;.'' . 

Mr?™ 

QMhi 

l.~„ 

M.^.M,-,. 

p--^ 

Tdtai. 

' 

, 

"»»9 

Form  2 — "Receipt"  page  of  Government  Cash  Book. 

ness  of  the  clerical  work  is  proved  by  the  addition  of  the  balance  of  cash  in 
hand,  balance  in  bank  and  total  payments,  and  these  should  agree  with  the 
gross  receipts  as  recorded  in  the  total  column.  The  principles  of  the  pro- 
vincial cash  book  are  well  exhibited  in  the  illustration  given,  the  limits  of 
the  page  being  too  circumscribed  to  permit  of  a  full  page  illustration. 


c 

po-fitrorv 

of  1K. 

Cou 

^K- 

rf 

Co 

Nome   af«i  DajCficuldOA 

'.■•■> 

fri:^:; 

0.»J.  a. 

3.b.~-t-.. 

*!_*, 

■'  •*■'';' 

Ti1»l. 

'V.I 

i            i  p,     k    nil-t- 

.,. 

, 

, 

Imperii   BtinK     PffiT 

1SQS 

-, 

Form  3. — "Payment"  page  of  Government  Cash  Book. 


The  headings  showing  the  divisions  of  account  as  they  appear  in  the 
various  books  are  as  follows : 

TOWNSHIPS. 

Receipts:  (1)  Resident  Taxes,  (2)  Non-Rersident  Taxes,  (3)  Arrears 
of  Taxes,  (4)  Dog  Tax,  (5)  Fines,  (6)  School  Purposes,  (7)  Licenses,  (8) 
Debentures,  (9-  Bills  Payable,  (10)  Loans,  (11)  Miscellaneous,  (12)  to 
(17).  In  blank  for  such  other  accounts  as  it  is  found  necessary  or  desirable 
to  exhibit  individually. 

Payments:  (1)  Salaries  and  Allowances,  (2)  Stationery  and  Printing, 
(3)  Law  costs,  (4)  Roads  and  Bridges,  (5)  Charity,  (6)  County  Rates,  (7) 
School  Purposes,  (8)  Interest,  (9)  Board  of  Health,  (10)  Debentures,  (11) 
Coupons,  (12)  Loans  and  Notes  paid,  (13)  Deposits  in  Sinking  Fund  Ac- 


count,  (14)  Drainage,  (15)  Miscellaneous,  (16  to  20)  in  blank  for  such 
other  accounts  as  it  is  found  necessary  or  desirable  to  exhibit  individually. 

VILLAGES. 

Receipts:  (1)  Bills  Payable,  (2)  Resident  Taxes,  (3)  Non-Resident 
Taxes,  (4)  Dog  Tax,  (5)  School  Purposes,  (6)  Licenses,  (7)  Fines,  (8) 
Rents,  (9)  Debentures,  (10)  Loans,  (11-  Miscellaneous,  (12  to  15)  in  blank. 

Payments:  (1)  Bills  Payable,  (2)  Salaries,  Allowances,  etc.,  (3) 
Printing,  Postage,  Advertising,  (4)  Interest,  (5)  Law  Costs,  (6)  Roads  and 
Bridges,  (7)  Charity,  (8)  School  Purposes,  (9)  Debentures,  (10)  Coupons, 
(11)  Fire  Protection,  (12)  County  Rates,  (13)  Loans  Current,  (14)  Street 
Lighting,  (15)  Town  Hall,  (16)  Deposited  in  Sinking  Fund  Account,  (17) 
Miscellaneous,  (18  to  20)  in  blank. 

TOWNS. 

Receipts:  (1)  Resident  Taxes,  (2)  Non-Resident  Taxes,  (3)  Arrears 
of  Taxes  (4)  Dog  Tax,  (5)  Water  Rates,  (6)  Rents,  (7)  Licenses,  (8) 
School  grants,  (9)  Debentures,  (10)  Loans,  (11)  Fines,  (12)  Market,  (13) 
Miscellaneous,  (14  to  17)  in  blank. 

Payments:  (1)  Salaries  and  Allowances,  (2)  Printing,  Advertising 
and  Stationery,  (3)  Insurance,  (4)   Fire,  Water  and  Gas,  (6)   Law  Costs, 

(7)  Roads  and  Bridges,  (8)  Charity,  (9)  Debentures,  (10)  Coupons,  (11) 
Bills  Payable,  (12)  Interest,  (13)  Waterworks  Capital  account,  (14)  Water- 
works Maintenance,  (15)  County  Rates,  (16)  School  Account,  (17)  Market, 
(18)  Board  of  Health,  (19)  Sinking  Fund,  (20)  Miscellaneous,  (21  and  22) 
in  blank. 

CITIES. 

Receipts:  (1)  Bills  Payable,  (2)  Debentures,  (3)  Resident  Taxes,  (4) 
Non-resident  Taxes,  (5)  Arrears  of  Taxes,  (6)  Interest,  (7)  Water  Rates, 

(8)  Market  Fees,  (9)  Market  Rates,  (10)  Police  Fines,  (11)  Licenses,  (12) 
Free  Library,  (13)  Public  Schools,  (14)  Miscellaneous,  (15,  16  and  17)  in 
blank. 

Payments:  (1)  Bills  Payable,  (2)  Interest,  (3)  Board  of  Works,  (4) 
Free  Library,  (5)  Public  Schools,  (6)  High  Schools,  (7)  Printing,  Advertis- 
ing and  Stationery,  (8)  Fire,  Water  and  Gas,  (9)  Police  Commission,  (10) 
Parks  and  Trees,  (11)  Market  House,  (12)  Salaries,  (13)  Debentures,  (14) 
Coupons,  (15)  Board  of  Health,  (16)  Charity,  (17)  Water  Works  Main- 
tenance, (18)  Sewer  Maintenance,  (19)  Deposited  in  Sinking  Fund,  (20) 
Miscellaneous,  (21  and  22)  in  blank. 

COUNTIES, 

Receipts:  (1)  County  Rates,  (2)  Land  Tax  Account,  (3)  Licenses, 
(4)  Schools,  (5)  Registry  Office,  (6)  Roads  and  Bridges,  (7)  Administra- 
tion of  Justice,  (8)  Magistrate's  Fines,  (9)  Debentures,  (10)  Loans,  (11) 
Redemption  of  Lands,  (12)  Division  Court  Fund,  (13)  Miscellaneous,  (14, 
15  and  16)  in  blank. 

Payments:  (1)  Administration  of  Justice,  (2)  Land  Tax  Account,  (3) 
Roads  and  Bridges,  (4)  Miscellaneous  Grants,  (5)  Municipal  Government, 
(6)  School  Purposes,  (7)  Registry  Office,  (8)  Gaol,  (9)  Printing,  Advertis- 
ing and  Postage,  (10)  Redemption  of  Lands,  (11)  Law  Costs,  (12)  De- 
bentures and  Coupons,  (13)  Loans  Current,  (14)  Interest,  (15)  Deposits  in 
Sinking  Fund,  (16)  County  Property,  (17)  Insurance,  Heat,  Light,  etc., 
(18)  Division  Court  Fund,  (19)   Miscellaneous,   (20,  21)  in  blank. 


Objection  is  sometimes  made  to  the  labor  involved  in  the  carrying  of 
the  continuous  balances.  There  might  be  force  in  this  objection  if  the  of- 
ficial were  to  follow  slavishly  the  bringing  down  of  the  balances  with  every 
entry.  While  such  a  proceeding  was  necessary  in  the  pro-forma  sheet 
which  is  embodied  in  each  cash  book,  it  is  not  really  expected  or  required 
in  actual  practice.  The  sum  of  all  checks  entered  at  one  time,  or  of  all  de- 
posits, may  be  readily  deducted  from  or  added  to  the  balances,  at  single 
operations.  So  long  as  the  totals  and  balances  are  recorded  at  the  con- 
clusion of  each  day's  business,  the  modus  operandi  whereby  this  is  effected 
is  of  small  moment. 

THE  TWO  VOLUME  CASH  BOOK. 

In  the  larger  municipalities  where  the  accounts  are  kept  in  greater  de- 
tail, another  form  of  Cash  Account  is  recommended.  In  this  the  principles 
embodied  in  the  cash  books  already  described,  are  followed,  with  the  colum- 
nar analysis  reduced  in  some  degree,  in  view  of  the  fact  that  the  ledger  will 
be  utilized  to  a  much  greater  extent  than  is  usual  in  most  of  the  munici- 
palities where  the  cash  books  previously  described  are  used. 

It  is  preferable  that  the  general  cash  book  should  be  in  two  volumes, 
the  receiving  cash  book  to  contain  all  revenues,  with  analyzing  columns 
for  the  representative  sources  of  income.  The  form  (4)  fully  exemplifies 
the  idea. 


Ciccivir-srt     C'^sK,   tt)ook_-- 

;  ■■• 

fctJ, 

■X 

of  AcccxjrsJ^ 

iMt- 

t^^H^j 

0»*euU> 

'■:'" 

Oebd 

^«f 

&Av« 

- 

T—h 

L.,h,t 

>.w.-' 

L_.Gcr*e: 

Qcrcte|Cb«Tix 

SS 

U»n. 

"  ".1  Ir-t 

To^lo 

/ 

| 

1 

Form  4 — Showing  Page  of  Receiving  Cash  Book. 

As  deposits  are  made  in  bank,  credit  is  taken  in  the  proper  column,  and 
the  remainder  in  the  balance  column,  exhibits  the  cash  in  hands  of  the 
treasurer. 

The  paying  cash  book  contains  the  bank  account  in  ordinary  bank  de- 
posit ledger  style,  with  the  distribution  of  accounts  following.  Form  (5) 
makes  further  explanation  unnecessary. 


ftyy 

C^Book. 

eJU 

^.io^  of  Accxaur^* 

CMt 

U.__J 

>-A...r 

**-• 

52 

as 

«b 

«»v 

PL. J 

rwJ.f 

,.L 

-,.,|y 

_'« 

n  1 

fei 

f.\ 

s 

vA 

Form  5 — Showing  Page  of  Paying  Cash  Book. 

Where  the  volume  of  business  requires  a  division  of  labor,  the  two- 
volume  cash  book  becomes  a  necessity. 


ABSTRACT  REPORTS. 


The  prime  advantage  of  the  Columnar  Cash  Book  is  that  the  official 
is  enabled  to  prepare  with  a  minimum  of  labor,  a  daily,  weekly  or  monthly 


abstract  of  receipts  and  disbursements  for  transmission  to  the  council  or 
auditors. 

C©r»por»atior\  e>i    ip5s    Co«jr^K?'  or 


S,*tSterr\enT' 

of  D< 

ceipfS  ttrvd    Di.»bvirvsenry=r\te 

«ftf 

>-^-     tc 

'  ■ 

\&& 

1 

DeceiptS 
Belaroe  or\  hand 

■  r,  e>or\K 

L-orvoJ   Tax  Account 

Lost  Deport 

Total 

Oi»bo  rae  rr\e  r\TS 

AdrnWitnafen  oF  JuSfe. 
Land  Tax  Account" 
Doodo    end    B>rldcje& 

M*jrMC.tpttl       GoAKtS 

As  at~ 
LaSi  Deport 

Last  Deport 

Tot 

Licer\ce» 
ScKoola 

D^ia.tPV  Office. 
Dosds   and  Bridg,e» 
Admin, »tr=a*bn  of  Justice 
Macsistrofea    Hnea 
De-beKtCT-e© 

l_oar\.» 

Irxtereat" 

DedemptTor,  of  Lands 
Qivoiom    Court  food 

5cKool      LAjrpoae— > 

Gaol        ^ 

Printrrjo).  Stationery.  «tt 
QedemptTon    of   Landa 
Law      Cosjta 
DebenTure.3  fi-Coupons 
Loena     <Cvjrrerrl~ 
lKte>e«f- 
e>irvKir\o>     fLr\d! 
Co<_jr\ty.     Properly 
Ineunence.  Meat  Liflhfetc 
D.v.olon.  Court  furxd 
Miocelloneous 

Miscel  lar\e.o<_i& 

Balance  due  from  DanK 
Balance    or,  Knr\d 

9 

ft 

ft 

C*W?«d  Cc 


Co.  Tre; 


Form  6 — Abstract  Statement  of  Receipts  and  Disbursements,  as  Applicable 

to  Counties. 

The  form  above  is  fairly  full  and  comprehensive,  being  to  some  extent 
comparative,  when  taken  in  conjunction  with  the  previous  report. 


CHAPTER  III. 

The  Journal. 

The  aim  of  many  book-keepers  of  the  present  day  is  to  do  away  alto- 
gether with  the  journal,  and,  to  accomplish  this,  matter  entirely  foreign  to 
the  cash  account,  is  often  introduced  therein.  While  it  is  desirable  to  use 
the  journal  to  the  least  possible  extent,  yet  it  cannot  be  altogether  dis- 
pensed with,  it  is  necessary  that  the  introduction  of  rates  and  revenues 
should  be  recorded  in  the  journal,  the  transfer  of  entries,  the  correction  of 
errors,  which  may  occur,  the  collating  of  the  municipal  "profit  and  loss" 
account,  and  the  closing  entries  of  each  fiscal  period. 


CHAPTER  IV. 

The  Ledger. 

The  ledger  does  not  differ  from  the  form  in  use  for  commercial  pur- 
poses, nor  do  the  principles  involved  in  the  keeping  thereof  differ  in  any  ma- 
terial point.  The  material  for  a  perfect  balance  sheet  should  be  contained 
between  the  covers  of  a  properly  kept  ledger,  and  such  a  balance  sheet  will 
show  in  concise  form  the  exact  financial  position  of  the  municipality.     In 


the  allocation  of  the  various  accounts  in  the  ledger,  regard  should  be  had 
to  the  position  which  they  occupy  in  the  balance  sheet  and  revenue  account. 
Much  time  will  be  saved,  both  to  the  officials  and  the  auditors,  if  the  details 
of  all  transactions  be  fully  set  out  in  the  ledger.  If,  as  properly  should  be, 
the  treasurer  were  compelled  by  the  auditors  to  prepare  the  annual  state- 
ments and  submit  the  same  to  them  for  inspection,  the  advantage  of  giving 
the  particulars  of  each  entry  in  the  ledger  would  be  much  more  deeply  im- 
pressed upon  that  official. 


CHAPTER  V. 


Subsidiary  Books. 

It  is  of  great  importance  that  the  utmost  facilities  should  be  provided 
for  internal  checking,  in  the  preparation  of  the  various  subsidiary  books,  as 
the  water  rates,  electric  light,  and  collector's  tax  rolls.  In  the  case  of  the 
collector's  roll,  a  form  largely  statutory  must  be  used.  In  the  other  depart- 
ments mentioned,  such  records  may  be  kept  as  are  prescribed  by  the  coun- 
cil or  adopted  by  the  officials,  and  these  are  perfect  or  imperfect,  accord- 
ing to  the  ability  of  the  designer. 

THE  COLLECTOR'S  ROLL. 

As  stated  above,  the  form  for  this  is  largely  statutory,  and  one  is  bound 
to  admit,  speaking  from  the  accountant's  standpoint,  there  is  much  room 
for  improvement.  I  have  prepared  a  sketch  which  I  am  inclined  to  say 
would  much  better  fill  the  requirements  of  the  municipality,  and  satisfy  the 
accountant,  than  the  stock  form  ordinarily  in  use.  Provision  is  made  for 
a  complete  internal  check.  As  many  columns  would  be  required  for  special 
rates  as  there  are  local  improvements. 


Colled©*  Qoll   • 

"?oc 

-     City-    oT  .. 

si^ 

g^kggg. 

m 

m 

ba&fec" 

5^ 

r- 

■Sr 

S3 

:-" 

-'. 

?: 

■ 

:• 

'•-:  ~ 

•' 

;- 

" 

•z 

*f*J 

;- 

« 

Form  7 — Showing  Improved  Collector's  Roll. 

collector's  cash  book. 
The  collector's  cash  book  should  be  ruled  so  as  to  show  in  its  various 
columns  the  moneys  collected  for  arrears  of  taxes,  for  percentages,  and  the 
current  taxes  should  be  analyzed  in  accordance  with  the  divisions  which 
have  been  made  in  the  posting  of  the  several  items  to  the  ledger,  with  a 
column  for  credits,  as  payments  are  made  to  the  treasurer,  also  for  date  of 
payment,  and  signature  of  treasurer- 

THE  ASSESSOR'S  ROLL- 

Being  statutory  in  form,  and  covering  pretty  accurately  the  necessary 
data  required  for  the  preparation  of  the  collector's  roll,  no  changes  are  sug- 
gested in  the  ordinary  form. 

WATER  WORKS  ACCOUNTS. 

The  forms  presented  herewith  cover  the  principal  books  of  account- 
ing in  a  waterworks  department,  and  are  more  especially  designed  for  use 


K) 


where  the  waterworks,  though  under  corporate  ownership,  are  controlled 
by  a  commission.  With  slight  changes  they  may  be  utilized  and  made  to 
form  a  part  of  the  system  if  under  the  control  of  the  treasurer,  the  prin- 
ciples involved  in  both  cases  being  the  same. 

The  water  rate  register  contains  on  one  page  the  house  number,  assess- 
ment roll  number,  office  progressive  number,  name  of  occupant,  owner, 
street,  ward,  etc.,  in  detail ;  then  comes  the  assessed  value,  upon  which  is 
based  the  property  charge,  and  the  special  rates  for  which  charges  are 
levied.  These,  of  course,  vary  with  the  different  methods  of  imposing 
rates.  The  various  rates  are  totalled  in  the  column  for  that  purpose.  The 
right  hand  page  is  of  the  most  importance  to  the  accountant.  The  pro- 
gressive office  numbers  are  repeated  for  ready  reference  purposes.  Next 
comes  the  "arrears  from  previous  year,"  with  the  "pro-number"  for  that 
year,  and  next  is  the  "rate  for  half  year,"which  is  just  one-half  the  rate  in  the 
total  column  on  the  page  opposite.  It  may  be  said  that  the  writing  in  of 
this  column  each  term  is  unnecessary  work,  but  the  internal  check  cannot 
well  be  provided  in  any  other  way ;  and  for  the  further  reason  that  rates 
may  vary  term  by  term.  The  headings  of  the  columns  which  follow  are 
self-explanatory.  In  the  cash  columns  will  be  entered  in  the  upper  left  hand 
corner  the  cash  book  folio.  In  the  deduction  column  will  be  entered  all 
abatements  or  allowances  made  on  account  of  "no  horse,"  "no  cow,"  no 
"double  tenancy,"  etc.,  the  receipt  of  which  abatements  must  in  all  cases  be 
acknowledged  by  the  signature  of  the  recipient  to  a  "deduction  slip."  The 
percentage  column  i's  called  into  use  immediately  upon  the  expiration  of  the 
date  set  for  payment  of  rates  without  the  imposition  of  the  penalty,  when 
each  delinquent's  account  is  charged  with  the  additional  rate.  While  the 
percentages  are  being  added,  the  closing  up  of  the  individual  accounts  is 
being  proceeded  with,  by  the  carrying  forward  of  all  unpaid  amounts  to  the 
"arrears  forward"  column.  This  accomplished,  the  various  columns  are 
footed  and  checked,  when  the  sum  of  the  debit  columns  must  equal  the  sum 
of  the  credit  columns. 


fU 

TCD    WATCH    QCCMTra 

VrADD  NO 

3uB-av/*o 

V£Af>  rslDIHG 

DCC.  31  ISO 

rfcux! 

ftr*: 

>*., 

0»i7*» 

eU 

■fifrfl 

,^u» 

.1 

OtrW- 

,\-r..l 
..... 

Dfj.cr.pf.on    of    Dot** 

7,,;' 

:  i.-- 

.,* 

Clnorl 

- 

.-,„.: 

Sp«<=I.R<de>rirHtU=, 

■ 

TblOcoftbOatt 

. 

Form  8 — Left-hand  page  of  Water  Rates  Register. 


ATri 

ivATea  at 

'OI3TCO     WADD  NO 

oua  a 

I'M). 

YCX\a  Ch/DilvO     DCC 

3i  /a  o 

Qrmoi-Ks 

f,  0 

Ho 

','/'' 

ft:::: 

njr -™,  p.^bl*  Apr  jo 

nJfv-no. 

..tJ.    Oct     so 

Arrrar-s     -fc    De<-  31 

fbn~o! 

B-o  No 

Pernor  t\a 

tW    .r 

•■.(' 

t 

['.V»,.r 

iw3 

l.'.J.  1 .. 

"KT" 

■'," 

•"'■'■ 

%7™ 

Ar«~ 

0«U.« 

Form  9 — Right-hand  page  of  Water  Rates  Register. 

Form  io  illustrates  the  "receiving  cash  book,"  and  requires  no  explana- 
tion from  me.  In  the  case  of  a  Commission  the  "credits"  column  records 
the  bank  deposits,  and  if  the  payments  are  handled  through  the  treasurer's 
office,  the  amount  transferred  to  the  general  cash  book. 

The  gross  rates  levied  are  charged  to  water  rates  account  half-yearly, 
the  contra  entry  being  to  revenue  account.  At  the  close  of  each  term,  the 
deductions,  discounts,  etc.,  are  credits  to  water  rates  account,  and  a  corre- 
sponding debit  is  made  to  water  rate  discounts,  which  ultimately  finds  its 


11 


way  to  the  debit  of  revenue  account.     Percentage  is  a  debit  to  water  rates 
account  and  a  credit  to  revenue. 


WINDSOR     WATCD    COMMISSION 

CASr-i     RECCIVtD 

Dale 

f^r>tieu(caA»    fro  No 

5pcc»l 

VMtifor 

Ar,-   OSHJ 

Wrtt»r 190 

ArrUCurrj-f 
R-W  Wafer 

RtJ  Wafer 

Cred.fe, 

Balarjce 

DiscoMntit 
Deduct<or7* 

Form  10 — Water  Rates  Receiving  Cash  Book. 

A  separate  register  is  maintained  for  use  in  the  recording  of  metered 
water,  an  excellent  form  for  which  is  given  herewith. 

Where  the  waterworks  are  handled  by  commissioners,  who  disburse 
their  own  funds,  a  combination  cash  book  and  voucher  register  is  used,  as 
per  Form  .12.  The  principles  applied  here  are  the  same  as  those  employed 
in  the  provincial  cash  book,  and  require  no  further  elucidation.  The  dis- 
tribution of  accounts  is  divided  into  five  general  headings,  "office,"  "pump- 
ing station,"  "distributing  system,"  "meters"  and  "general,"  and  these  are 
again  subdivided  to  the  regular  accounts  to  be  found  under  each. 

WINDSOR     WATER     COMMISSION 

VDUCMER   CA3" 


Da-le 

F3sr-Tic<_ilAr>.» 

Nlo 

Deb.+ 

CreJ;4- 

Dr>.  E>a,lar^:<s  [Cr  E>*l«»r?ce 

/INDSOR      WATEB 

D^TPtfiuTlON     or 

COMMISSION 

Off.« 

R^p,,*  ^>t= 

Di»V,bot,o^   5>^+trrv 

a< 

nenal 

•  .-..»•  -- 

S-i,  - 

.->;*,.-, 

Sdar,,. 

•...■! 

ftr   .- 

. . .,.,). , 

Wod»=> 

Bepolw 

'' 1", 

,,  .),, 

OrWrftt  lot 

!    - 

.,: 

:^li"" 

m.„ 

Tola 

- 

^C 

Form  12. — Voucher  Cash  Book  and  Register. 

TAX    RECORDS. 

In  the  matter  of  keeping  records  of  the  arrears  of  taxes  there  is  great 
diversity  of  method.  The  larger  corporations  are  usually  more  careful  in 
the  keeping  of  these  accounts,  but  there  is  yet  a  lamentable  lack  of  an  et- 
ficient  means  of  "ready  reference."  An  index  prepared  in  three  parts,  each 
of  which  relates  to  the  other,  while  some  trouble  to  prepare  will  be  found  to 
prove  of  great  value  as  a  time  saver.  Part  one  is  an  alphabetical  index  of 
the  streets,  referring  to  part  3,  as  seen  in  the  illustration. 

Part  2  is  a  list  of  the  different  plans,  commencing  with  the  Crown  or 
Government  survey,  and  also  referring  to  Part  3. 

Part  3  is  the  index  proper.  Each  lot  is  given  a  line  to  itself,  and  every 
parcel  of  property  in  the  corporation  is  gathered  into  the  index  under  its 
pr<  iper  street  and  plan. 

When  the  uncollected  taxes  have  been  returned  to  the  treasurer,  an 
account  is  opened  in  the  lot  ledger  (if  one  be  not  already  opened)  for  each 


L2 


1 

v 

z 

0 

3 

0 

50 

5- 

r> 

E- 

0 

0'  ' 

( 

J"? 

»     T1 

5, 

£? 

?3L 

<»o 

-J 

3 

<?~ 

"ft  — 

> 

t: 

9 

5*7 

o  3 

a:^ 

?0 

0> 

r  tl 

So 
SO 

"I 


N 

?    n 

z 

- 

j 

i 

0 
0 

I"? 

4 

\ 

^5° 

61  ^ 
o'D> 

T    *   ft 

Si**1 

3J 

I] 

/I 
3 

I/1 

si 

-o 

75' 

property  against  which  there  is  arrears,  and  the  ledger  folio  entered  op- 
posite the  lot  in  Part  3  of  the  index.  As  the  arrears  are  paid  the  ledger  folio 
is  marked  off.     When  a  search  is  required,  reference  is  made  to  the  index. 

STREET  INDEX 


Name  of  street 

Index  Pol  105 

Adelaide 

15 

17 

IZ 

23 

14- 

Z.9 

65 

67 

Aurelia 

65 

66 

67 

66 

Arnold 

93 

95 

96 

Baldwin 

3Z 

53 

34- 

3b 

36 

Baxter 

59 

90 

Carleton 

PI 

92 

Form   13. — Street   Index   (Part.    1). 

If  there  are  no  folios  against  the  lots,  or  if  crossed  off,  there  are  no  arrears, 
and  the  search  is  completed ;  always  presuming,  of  course,  that  the  work  is 


PLANS 


No 


2 

3 

37 

46 

|40 


For  whom  Purveyed 


Old   5urvey 
Thps.  Beat  tie 
fO.  Wood 
G.  Thomas 
Read  &Pegley 
Jno.  Nortnwood 


)y  whom  Purveyed 


Crown 
A.P.5alter 
R.Parr 
do 
Salter  &  Jones 
W.G.Mc.Genze 

Form   14. — Index  of  Plans 


Index  rolios 


15 
27 
31 
39 
43 


04J105 


Z7 

29 
38 
43 

49 


faithfully  done,  upon  which  foundation  the  value  of  any  system  must  de- 
pend. When  posting  from  the  collector's  roll  to  the  lot  ledger,  the  posting 
folio  should  be  entered  in  each  book  for  ready  reference. 


OLD  SU/?IS£Y 

Noof 

Naof 

fronting  on  Street 

Ledper  Polios 

BlocK 

Lot 

1 

N.Water 

2 

b.  Stanley 

60 

J 

Stanley          E.Nmth, 

4 

N.Water           Ll.Ninth, 

3 

N.Water         W  .Ninth, 

39 

6 

5.  Stanley        WNintt\ 

7 

5.  S tan  ley 

do 

8 

N.Water 

9 

N.Water 

10 

^.^tanley 

10 

Form  15. — Index  to  Lots. 
In  a  paper  read  before   the  Institute  of  Chartered   Accountants   some 
years  since,  by  the  late  Mr.  Powis,  is  was  suggested  that  in  case  of  minor 


14 


municipalities,  arrears  of  taxes  should  not  be  reported  to  the  county  treas- 
urer "unless  and  until  the  arrears  have  reached  that  point  when  the  land  is 
liable  to  be  sold  for  taxes."  In  this  suggestion  I  most  heartily  concur.  This 
phase  of  municipal  government  as  it  stands  at  the  present  time  is  most  pro- 
lific in  loss,  trouble  and  annoyance. 

My  sentiments  also  are  practically  voiced  in  his  remarks  as  to  the 
proper  method  of  procedure  prior  to  sale.  "After  the  time  has  passed  dur- 
ing which  taxes  ought  to  be  paid  in  each  year,  a  return  should  be  made  by 
the  minor  municipality  to  the  county,  showing  what  properties  are  then 
liable  to  be  sold  for  taxes.  Only  between  such  date  and  the  day  of  sale,  and 
only  concerning  such  properties  as  are  liable  to  be  sold,  should  it  be  neces- 
sary to  apply  to  the  county  officer  at  all-  A  sale  should  be  held  by  the 
county  officer  only  once  in  each  year,  when  there  is  any  property  liable  to 
be  sold.  Such  sale  should  be  held  before  the  time  for  striking  the  rate  by 
the  municipality.  Immediately  after  the  sale  the  county  officer  should 
make  a  return  to  the  minor  municipality,  showing  the  result  of  each  sale, 
and  remitting  the  money  collected,  after  deducting  his  charges.  The  trans- 
actions of  each  year  should  thus  be  closed  and  balanced.  The  only  record 
necessary  then  on  the  part  of  the  county  officer  is  a  full  account  of  the  cir- 
cumstances connected  with  each  sale  and  the  result.  And  it  is  not  neces- 
sary that  the  county  officer  should  keep  any  further  account  concerning  ar- 
rears of  taxes.  This  system  and  process  should  go  on  from  year  to 
year,  the  county  officer  acting  each  time  solely  on  the  new  report  handed 
him  from  the  minor  municipality."  There  would  then  be  no  mixing  up  of 
the  township  and  county  business.  Full  remittance  would  be  made  to  the 
minor  municipality  for  the  proceeds  of  the  tax  sale,  and  the  local  municipal- 
ity should  then  remit  in  full  to  the  county  treasurer  for  the  county  rate.  In 
cases  of  redemption  the  county  officer's  receipt  would  be  a  sufficient  vouch- 
er for  the  township  treasurer,  upon  which  to  return  the  purchase  price  to 
the  vendee  at  the  tax  sale. 

Till  such  time  as  our  legislators  may  be  brought  to  see  the  necessity 
for  simplification  of  the  methods  as  at  present  prescribed  by  the  statutes, 
these  methods  must  be  followed.  In  the  majority  of  rural  municipalities, 
great  carelessness  exists  in  keeping  the  records  pertaining  to  these  arrears. 
In  most  townships  absolutely  no  account  ist  taken  of  the  arrears,  once  they 
have  been  sent  to  the  county  treasurer,  and  no  check  is  had  thereafter  upon 
either  official.  County  auditors  in  a  number  of  instances  have  declined 
to  go  into  the  county  treasurer's  accounts  relative  to  these  arrears,  on  the 
ground  that  such  was  outside  the  scope  of  the  audit,  and  that  the  county 
treasurer  in  keeping  these  accounts  was  the  agent  of  the  rural  municipali- 
ties and  not  of  the  county. 

If  a  systematic  record  upon  the  following  lines  be  kept,  no  difficulty 
will  be  experienced  in  maintaining  a  perfect  and  accurate  account  of  tax 
arrears. 

The  clerk  of  the  minor  municipality  to  prepare  the  non-resident  roll  in 
duplicate,  sending  one  copy  to  the  county  treasurer  and  the  other  to  the 
treasurer  of  his  own  municipality,  who  will,  upon  receipt  thereof,  enter  in  a 
properly  ruled  lot  book  or  ledger,  the  charges  against  each  property  af- 
fected. Upon  receiving  the  return  of  "uncollected  taxes"  from  the  collector 
the  treasurer  should,  in  like  manner,  and  in  the  same  book,  enter  all  prop- 
erties returned,  with  the  amounts  against  each.  Upon  May  ist  in  each 
year,  (the  date  set  for  the  statutory  addition  of  10  per  cent.)  the  county 
treasurer  should  prepare  a  statement  in  detail  of  the  percentages  added  by 

15 


SE  zr  L  OT  73    CO/V  2  (NOA/-fi£s/Dfnrj 


May 


N.P.Taxes/894 
10% 
\0% 


1450 
145 


1450 


59 


Nov 


Co  Tresis 


17 


54 


LL 


54 


Form   16. — Ledger    Specifications  for    "Non-Resident' 

for  Taxes. 


Lands    in  Arrears 


him  to  the  various  arrears,  transmitting  the  same  to  the  several  treasurers 
of  the  minor  municipalities,  who  in  turn  will  enter  the  amounts  so  reported 
against  the  respective  lots  in  the  lot  ledger-  As  payments  are  made  to  the 
county  treasurer,  he  is  required  by  the  law  as  it  now  stands  to  prepare  re- 
ceipts in  triplicate — one  of  which  goes  to  the  payor,  the  second  to  the 


/Vy 

LOT  7  CO  A/  /O  CjOhn  j>M/rrtj 

Date 

Particulars 

Ch,aroe5 

Total 

Date 

Particulars 

Amnt. 

Total 

Ma/ 

9J 

1 
96 

I 
97 

1 

98 
1 

Taxes  1894 
10% 
10% 
10% 

61 
6 
6 
7 

00 
10 
71 

38 

61 
67 
73 
ftl 

00 
10 
81 
19 

Ma/ 

98 

Co  Treas. 

fti 

19 

81 

19 

Form  17. — Specification  for  Resident  Arrears  Ledger. 

county  clerk,  and  the  third  he  retains.  What  good  purpose  the  sending  of 
the  receipt  to  the  county  clerk  is  intended  to  serve,  I  have  never  been  able  to 
discover.  He  files  it  away  and  that  is  the  end  of  it.  If,  instead,  the  second 
receipt  were  sent  to  the  clerk  of  the  municipality  interested,  by  that  official 
to  be  carefully  filed  for  the  future  use  of  the  auditors,  a  better  purpose 
would  be  served.  Then,  quarterly,  the  county  treasurer  should  remit  to  the 
local  treasurer,  by  check,  the  full  amount  of  taxes  collected  during  the  pre- 
ceding three  months,  together  with  a  statement  showing  the  dates  of  pay- 
ment, and  the  amounts  of  several  collections,  when  the  necessary  entries 
should  be  made  in  the  cash  account  and  lot  ledger  of  the  minor  municipality. 
The  accounts  of  the  local  treasurer  would  then  at  all  times  show  the  exact 
standing  of  the  municipality  as  regards  arrears  of  taxes. 

The  triplicate  receipt  is  now  not  necessary — a  duplicate  receipt  being 
sufficient — one  copy  going  to  the  person  paying  the  taxes ;  the  other  being 
retained  in  the  treasurer's  office. 


10 


DEBENTURE  REGISTER. 

A  complete  record  of  the  debenture  indebtedness  of  every  municipality 
is  of  absolute  importance.  Before  the  debentures  leave  the  hands  of  the 
treasurer  all  particulars  relating  thereto  should  be  entered  in  a  debenture 
register,  a  very  comprehensive  form  for  which  is  herewith  submitted.  It 
will  be  observed  that  the  fullest  information  is  required  to  be  entered  as  to 
the  amount,  years  to  run,  dates  payable,  place  of  payment,  annual  payment 
of  principal  and  annual  payment  of  interest  as  represented  by  the  coupons, 
dates  due,  and  payments  to  the  sinking  fund,  when  the  debentures  are  is- 
sued upon  that  plan.  Other  particulars,  as  to  the  number  of  by-law  au- 
thorizing the  issue,  date  of  sale,  persons  to  whom  sold,  date  of  delivery, 
amount  received,  divided  as  to  principal,  premium  and  accrued  interest. 
Then  the  total  amount  to  be  raised  annually  by  assessment,  with  particulars 
as  to  how  much  is  from  the  individual  property  owners,  in  case  the  work  on 
account  of  which  the  debentures  are  issued,  is  in  the  nature  of  a  local  im- 
provement. The  specification  given  illustrates  the  idea  for  a  ten-year  de- 
benture.   The  register  should  be  ruled  so  as  to  cover  twenty-year  issues. 


Qegvfen   of  C 

at                               ' 
Couporv   for  »n1ert 
or\1f<             doy  of 

cbenfar*ez>  \  issued    by  1he. 

Ten-rTY    '                                >•«*» 
e.  or>  1ne.                             day  oT 

>t  at                  percent,  payable               yearly 

I©            Egual    annual    payn\en+   on  occoont 
3+  of>  annual  pavmertf  t&  £*nt\ir\a  fundAccI  * 

of 
Cfebrn1ur»e»   issued    uryfcp  *fce 
Do*  of  .»uc                           lO 

Ol.vc«cd               (p_^    ^a 
CcoKOooh  6l,o      fe^T*"  T 

AjIRo.^-  of   Dy  Law  No                      . 

Tblol    OTNourtt  onnool    levy                     • 
ArrvXjrlt  pflieed  by  Mor\.opolrty            • 
_  Amour*   le^ed  ors  p-ooc«y  o~,-«~» 

■    - 

/w* 

£gL 

,'  "-•' 

'.l"f 

C  O 

- 

dJ<? 

•_  & 

Cfe-J 

.;::.' 

p..d 

c  r> 

IMo« 

C  B 

:;;., 

'      P. 

NoO 

P*»«l 

u„  4 

B 

Nolo    Oc-4 
d„i      C  O 

Clt 

s 

» 

::,' 

2 

I 

2 

j 

\ 

^ 

^ 

' 

- 

J.L. 

_ga 

_^ 

a 

■  — 1 

Form  18. — Specification  for  Debenture  Register. 

GROSS  DEBENTURE  LIABILITY   SCHEDULE. 

To  enable  the  treasurer  to  readily  ascertain  the  total  debenture  indebt- 
edness of  the  municipality  at  a  glance,  as  it  matures  year  by  year,  a  sched- 
ule prepared  after  the  specification  exemplified  in  Form  19  will  be  found  to 
be  of  inestimable  convenience.    The  footings  are  carried  in  pencil,  until  the 


s& 

ir. 

nto 

f  Debefit 

jr-eDcb 

...-.dfe-*. 

c 

/c Municif 

J 

ByLow  No  173  fo**5ooc  peaoed  July  l^~ 
099pav*bleir13Y"&  Irsfe"eat6%p<w  «n- 
r*jft\  Coupons  poyabk  July.  £,  Ja^  I4 

eyLowNo42*l  fe«»72oopo&scd  Oc  1^ 
■6©9  payable,  m  5yro  IrJcPcaT  6%  Cou- 
porv  payable  Jan  1*  cVJutyl*' 

OyLowlNoi342  fo»*3feoo  paae-rd  LVc 
■3*  1099  payable  m  5v*»  Wcwt  fe% 
Coupon©    payable    June  13  t  Dec  <5T 

Cs-  Law  No  61 1  fo*>  *3oooo  passed  Jan  1 
Coupoo©    payOblr      July  1  C Jar*  1^ 

-   i- 

C°"E- 

'    •» 

.an 

> 

K 

" 

'."<, 

w'-. 

« 

La 

" 

"" 

Li 

S« 

=* 

1 

- 

Li 

w~ 

_^-. 

J_^J. 

t  as 

Form    19. — Schedule  Showing   Gross   Debenture   Liability- 
amounts  have  been  raised  and  the  debentures  retired.    As  new  issues  occur 
the  particulars  are  entered  from  time  to  time  and  the  pencil  footings  are 
corrected. 

The  careful  keeping  of  matured  debentures  is  a  matter  of  some  im- 
portance, and  one  much  neglected.     A  large  book,  similar  to  the  ordinary 


17 


invoice  book  used  in  the  commercial  world,  and  ruled  after  the  manner  of 
Form  20,  arranged  to  accommodate  twenty  coupons,  is  about  as  convenient 
a  method  of  keeping  these  as  I  have  seen.     As  the  coupons  mature,  and 


Debcr\fcji 


Foil  pe>p~tK:ul<ar\s>  wn>'tffeny  hcf=e.ir\ 
<^S>  ~io  deber\t<jr»e^  ~  diite.  issued  , 
amourtf",  date  due ,  "te  whom  sold 
whei=>e    payable. ,  eTte,.  wo, 


00 


9 

]00H 

12 

13 

ED  •• 

16 

\~7 

13                  IQ 

20 

Form  20. — Filing  Book  for  Cancelled  Debentures  and  Ciupons. 

are  paid  and  cancelled,  they  are  pasted  in  the  book  upon  the  block  corre- 
sponding to  the  number  (the  highest  number  maturing  first).  At  maturity 
the  page  contains  the  coupons  and  the  original  debenture,  all  in  order. 


CHAPTER  VI. 
Passing  Accounts. 

With  the  exception  of  those  payments  which  are  authorized  by  by-law 
or  by  statutory  enactment,  all  others  should  be  passed  upon  and  authorized 
by  the  council  previous  to  payment.  In  cities  and  towns  it  is  usual  to  pass 
the  accounts  first  through  the  several  committees  having  to  do  with  the 
expenditure,  being  finally  checked  by  the  Finance  Committee,  and  pre- 
sented in  their  report  to  the  full  council,  which  sanctions  payment. 

Another  method  is  to  have  all  accounts  first  come  before  the  council, 
where  they  are  read  in  detail  and  referred  by  that  body  to  the  proper  com- 
mittee. This  plan  necessitates  a  longer  wait  before  payment  of  the  ac- 
count can  be  had,  but  has  the  advantage  of  a  publicity  which  is  often  whole- 
some. 

In  the  case  of  minor  corporations  and  township  councils,  where  the 
meetings  are  held  less  frequently,  accounts  are  usually  received  and  dis- 
posed of  at  the  same  session. 


All  accounts  should  be  certified  to  by  an  official  of  the  corporation,  the 
chairman  of  committee,  or  a  member  of  the  council,  previous  to  presen- 
tation. 

Accounts  having  been  acted  upon  and  payment  authorized  by  the  coun- 
cil, a  warrant  or  order  upon  the  treasurer  is  drawn  and  signed  by  the  mayor, 
reeve,  or  clerk. 

The  usual  form  of  warrant  runs  as  follows: 


No.    

Sandwich,    189 

The  Treasurer  of  the  Municipal  Corporation  of  Sandwich,, 

Please   pay  to _ or  order, 

the  sum  of_ __ dollars, 

chardinq  to Account 

Mayor 


Form  21. — Ordinary  Warrant  Form. 

This  warrant  is  handed  to  the  person  in  whose  favor  it  is  made,  and 
he  presents  it  to  the  treasurer-  That  official  generally  takes  up  the  war- 
rant and  cancels  it,  after  issuing  his  check  for  the  same  amount  arid  to  the 
same  order.  This  operation  necessitates  a  duplication  of  work  by  the  clerk 
and  treasurer,  and  a  multiplication  of  vouchers  altogether  unnecessary. 
The  substitution  of  a  form  of  warrant  which  also  operates  as  a  bank  check- 


No. 

Sandwich, 189 

The  Treasurer  of  the  Municipal  Corporation  of  Sandwich 

Please  pay  to or  order 

the  ^um  of Dollars 

charging  +o Account 

Mayor 


Form  22. — Combination  Warrant  and  Check. 

when  countersigned  by  the  treasurer  does  away  with  the  double  labor  and 
provides  a  single  but  comprehensive  voucher. 


Ill 


With  this  warrant  in  his  hand  the  payee  applies  to  the  treasurer.  The 
treasurer  takes  the  warrant,  enters  it  in  his  cash  book,  and,  signing  it  in  the 
place  designated  in  the  illustration,  returns  it  to  the  person  to  whom  pay- 
able and  he  proceeds  to  use  the  same  as  an  ordinary  check.  If,  by  inad- 
vertence, the  treasurer  omits  to  enter  the  amount  and  particulars  of  the 
warrant  in  his  books,  he  is  bound  to  discover  the  error  and  rectify  it  at  the 
end  of  the  month,  when  he  proceeds  to  verify  his  cash  and  bank  accounts. 

SHEET    SYSTEM    OF    VOUCHER. 

An  excellent  system  and  one  which  will  prove  labor-saving,  as  well 
as  providing  a  means  for  the  further  multiplication  of  vouchers  is  the  fol- 
lowing, which  may  readily  be  adapted  to  the  requirements  of  township  and 
village  corporations. 

Upon  a  form  as  shown  in  23,  a  list  of  all  accounts  passed  should  be 
entered,  the  accounts  briefly  numbered  consecutively,  the  bill  itself  being 
given  the  same  number.  When  the  other  business  of  the  session  has  been 
completed,  this  list  of  accounts  should  be  formally  acted  upon,  by  the  pass- 
ing of  a  resolution  "that  accounts  numebred  30  to  37  be  passed  and  that  the 
reeve  issue  his  order  to  the  treasurer  for  payment  of  the  same." 

At  the  foot  of  the  form,  as  will  be  seen,  is  an  instruction  to  the  treasurer 
to  pay,  which  is  made  operative  by  the  signatures  of  the  reeve  and  clerk. 

In  writing  up  the  minutes  the  clerk  copies,  in  detail,  the  list  of  ac- 
counts, with  their  respective  numbers,  and  he  carefully  files  the  original 
bills,  which  have  all  been  properly  endorsed  with  a  number  corresponding 
to  that  opposite  the  account  in  the  list. 

The  original  list  is  then  transmitted  to  the  treasurer,  and  he  proceeds 
to  pay. 


Stale  mr.nf  of  Account?  passed  by  1f?e  Couoc/  o 

f  ff/e  Toivo     of                            on 

/SO 

No    J               N*tn« 

!%,-   Wbi+ 

Ac<5t  0,rfd 

AmounijSi^rTjStcjr^r  t£  Pec.pierjt 

fbl.o 

Da-feof  [No.    of 

/ 

1 

I 

1 

1 

The  Tr«5u» 
fjur7vber><rd 


Form  23. — Sheet  System  of  Voucher. 


CHAPTER  VII. 
Municipal  Banking. 

Every  dollar  which  goes  through  the  hands  of  the  treasurer  should 
pass  through  the  bank  account.  All  moneys  should  be  paid  only  by  bank 
check,  and  councils  should  make  this  compulsory.  It  is  advisable  to  have 
two  bank  accounts,  the  principal  one  of  which  should  be  in  a  chartered 
bank-  This  should  be  in  the  name  of  the  corporation  or  municipality,  and 
checks  thereon  to  he  signed  by  the  head  of  the  council  and  the  treasurer. 
Into  this  account  the  tax  collector  should  be  required  to  pay  all  taxes. 

The  second  accounl  should  he  in  the  name  of  the  treasurer  of  the  mu- 
nicipality, as  such,  and  all  funds  of  the  corporation  \\<»uld  require  to  pass 


20 


through  this  account,  but  not  more  than  a  stated  amount  should  be  allowed 
in  the  treasurer's  account  at  one  time.  As  the  treasurer's  account  becomes 
depleted  of  funds,  fresh  amounts  are  tranfserred  thereto  from  the  account 
standing  in  the  name  of  the  municipality.  The  reeve  or  mayor  of  the  coun- 
cil is  thus  enabled  to  keep  close  tab  on  the  affairs  of  the  municipality ;  and 
the  security  to  be  given  by  the  treasurer  need  not  be  as  large. 

It  will  often  be  found  convenient  that  the  treasurer's  account  shall  be 
kept  in  a  centrally  located  private  bank ;  and  this  is  permissable  with  the 
consent  of  the  council. 

There  is  no  objection  to  the  treasurer's  cashing  his  own  checks,  to 
oblige  a  ratepayer,  but  the  checks  so  paid  must  be  held  as  cash,  and  be  de- 
posited to  the  credit  of  his  account  at  the  first  opportunity. 

RECONCILIATION   STATEMENT. 

At  the  end  of  each  month  the  treasurer  should  check  his  cash  and  bank 
accounts,  and  prepare  a  reconciliation  statement. 

A  special  book,  ruled  to  three  columns,  should  be  kept  for  this  purpose. 

To  illustrate  the  idea,  examples  are  submitted. 

At  the  end  of  January,  when  the  treasurer  receives  his  bank  pass  book, 
he  finds  that  the  bank  reports  more  cash  on  hand  than  his  own  cash  book 
shows.  The  official  at  once  checks  the  accounts  and  finds  that  a  number  of 
checks  issued  and  charged  by  him  have  not  been  presented  for  payment 
previous  to  the  close  of  the  month.  He  then  proceeds  to  reconcile  the  ac- 
counts as  exhibited  in  Form  24. 


Jan.  31.    Bank  balance  per  Cash  Book. 
>i  ii  11  11     pass      ••     _ 


Less  O-S  Cheques: 

No.  230— I  ones 

"    332-Smith 

"    333 — Thomson 

"    375— Harum  &  Co... 
"    380— Fulton 


-Reconciliation  Statement. 


Form  24. 

Upon  receipt  of  the  February  account  with  checks,  the  treasurer  again 
checks  up,  and  after  clearing  off  the  business  of  the  month  just  closed,  he 
finds  that  the  bank  has  charged  two  or  three  items  not  in  the  current 
month's  business.  Without  searching  back  through  hundreds  of  stubs 
to  ascertain  what  these  items  represent,  he  at  once  turns  to  his  reconcilia- 
tion account  for  the  preceding  month,  and  finds  that  of  the  outstanding 
checks  at  the  close  of  the  month  Nos.  330,  375  and  380  have  peen  paid.  Of 
the  old  checks,  Nos.  332  and  333  are  still  outstanding,  and  these  are  brought 
down  to  the  next  account,  which  will  look  as  below: 

The  outstanding  checks  of  the  longest  duration  also  come  first  on  the 
list,  and  thus  a  quick  reference  tab  is  kept  upon  them,  and  after  a  sufficient 
length  of  time  has  elapsed,  duplicates  may  be  issued,  or  steps  taken  to  can- 
cel the  payment  of  the  outstandings,  as  the  circumstances  may  require. 


Feb.  28    Bank  balances  per  Cash  Book. 
"     Pass      "     . 
Less  O-S  Cheques- 
No.  332— Smith  

"    333— Thomson  

■'    396—  Meeking 

"    402— Somers 

"    417— Mitchell 


Form  25- — Reconciliation  Statement  No.  2. 
21 


The  account  may  be  kept  in  another  way,  by  taking  totals  instead  of 
balances,  as  the  following  formula  shows.  The  result  will  be  the  same  by 
either  method,  the  first  method  being,  to  my  mind,  much  the  more  practical. 


IV.  HI 
Jan.  1 
'•   31 

$137  50 
1731  37 

$1868  87 
i498  87 

"   31 

$370  50 

"   31 

$42  00 
37  M 
70  00 
20  00 
33  33 

$  573  83 
202  83 

Less  O-S  Cheques: 

370  50 

Form  26. — Another  Form  of  Reconciliation  Statement. 


CHAPTER  VIII. 


Vouchers. 

It  seems  almost  unnecessary  to  say  that  every  payment  must  be  sub- 
stantiated by  voucher,  upon  which  should  be  endorsed  the  authority  under 
which  payment  is  made.  It  is  be  not  convenient  to  utilize  the  check  num- 
bers, then  all  vouchers  would  best  be  numbered  consecutively,  and  the  num- 
bers should  find  a  place  against  each  item,  irrespective  of  the  number  of 
books  through  which  it  may  pass.  Reference  thereto  is  thus  much  facili- 
tated. Although  but  few  treasurers  so  regard  it,  yet  it  is  of  equal  import- 
ance that  good  and  sufficient  vouchers  shall  be  preserved  in  the  case  of  re- 
ceipts as  well  as  of  disbursements.  Just  here  I  may  interject  that  it  is  sur- 
prising to  find  how  little  attention  is  paid  by  the  rural  auditor,  and  in  many 
instances  by  the  auditor  of  urban  accounts  as  well,  to  checking  the  receipts 
as  against  their  various  sources.  It  seems  to  be  taken  for  granted  that 
there  can  be  nothing  wrong  with  the  receipt  side  of  the  cash  book,  but  the 
greatest  care  must  be  taken  to  see  that  the  treasurer,  in  making  disburse- 
ments, has  not  tampered  with  the  funds  of  the  rate-payers.  In  cases  of  de- 
fault, experience  goes  to  prove  that  the  trouble  most  often  arises  from  fail- 
ure to  charge,  rather  than  from  manipulation  of  the  funds  once  they  have 
been  entered  in  the  books  of  account. 

In  every  municipality  there  should  be  an  official  form  of  receipt,  and 
these  should  be  numbered  consecutively.  For  every  dollar  received  on 
civic  account  an  official  receipt  should  be  issued. 

Every  receipt  in  the  book  should  be  accounted  for.  In  case  of  an  error 
being  made  and  a  receipt  cancelled,  the  spoiled  form  should  not  be  de- 
stroyed, but  should  be  securely  attached  to  the  stub  or  counterfoil  of  the 
receipt  book,  for  the  benefit  of  the  auditors.  The  same  remarks  apply  to 
checks.  Checks  from  the  corporation  book  should  never  be  taken  for  other 
purposes,  and  every  form  should  be  accounted  for.  Explanations  to  the 
auditors  are  thus  rendered  unnecessary.  The  records  contain  their  own 
explanations. 


22 


CHAPTER  IX. 
Striking  the  Rate. 

In  many  municipalities  too  little  care  is  taken  in  the  preparation  of  the 
estimates.  It  may  be  that  although  the  whole  requirements  of  the  munici- 
pality are  provided  for,  yet  by  looseness  in  the  keeping  of  the  records,  the 
moneys  levied  are  not  applied  as  was  originally  intended  and  authorized. 
Greater  expenditures  are  made  in  some  directions  than  are  provided  for  in 
the  estimates,  and  to  meet  this  contingency,  some  other  fund  is  made  to 
suffer.  Usually  the  sinking  fund,  if  there  happens  to  be  one,  is  made  the 
scapegoat.  I  call  to  mind  a  recent  audit  where  in  twelve  years,  although 
the  sinking  fund  levy  was  placed  in  the  estimates  and  was  raised  each  year, 
yet  in  only  eight  of  the  years  was  the  sum  deposited  to  the  credit  of  the 
fund.  When  the  original  estimates  were  asked  for  they  were  not  forth- 
coming; had  not  been  preserved  after  the  by-law  striking  the  rate  had  been 
passed.  An  analysis  of  the  entire  tax  levy  was  thus  necessitated.  Had  the  es- 
timates been  filed,  and  the  amounts  levied  in  the  tax  roll  been  carried  to  the 
proper  accounts  in  the  ledger,  such  a  laches  could  not  well  have  occurred.  I 
recommend  that  the  statement  showing  the  estimates,  upon  which  the  by- 
law striking  the  rate  is  based  should  be  incorporated  in  and  made  a  part  of 
such  by-law,  or,  otherwise,  that  it  should  be  copied  in  full  in  the  minutes  of 
the  meeting  of  council  at  which  passed. 

The  statement  should  show,  first  the  sums  required  to  meet  the  several 
fixed  charges,  or  uncontrollable  expenditures,  and  next  the  amounts  which 
it  has  been  estimated  will  be  required  for  the  carrying  on  of  the  municipal 
government.  Against  these  should  be  placed  first  the  anticipated  revenue 
exclusive  of  the  tax  levy,  and,  second,  the  amount  which  must  be  raised 
by  impost. 


CHAPTER  X. 
Local  Improvements. 


When  a  public  work  has  been  decided  upon,  the  necessary  statutory 
preliminaries  having  been  observed,  there  are  two  methods  which  may  be 
followed  to  provide  funds  for  the  carrying  on  of  the  work,  (i)  by  issuing 
debentures  and  disposing  of  the  same  in  bulk  at  the  outset  of  the  undertak- 
ing, or  by  partial  sales  as  the  necessities  of  the  work  require ;  or  (2)  by  ef- 
fecting temporary  loans  as  the  work  progresses,  charging  capital  or  con- 
struction account  with  the  interest  of  these  loans,  to  the  offset  later  on  by  the 
interest  which  will  have  accrued  upon  the  debentures,  if  they  are  dated  con- 
currently with  the  initiation  of  the  work.  Very  often  it  is  impossible  to  tell 
at  the  outset  the  extent  of  the  expenditures  which  may  be  requisite  upon  a 
contemplated  work.  The  architect  or  engineer  will  furnish  an  estimate, 
generally  an  outside  figure,  and  upon  this  is  based  the  amount  for  which 
the  debentures  are  issued.  It  may  be  that  when  tenders  are  called  for, 
much  less  than  the  sum  estimated  will  be  needed,  and  if  so  then  the  full  issue 
of  debentures  will  not  be  necessary.  The  method  of  providing  the  requisite 
funds  by  temporary  loan  would  seem  to  be  preferable,  if  only  for  this  rea- 
son;  but  where  the  work  under  construction  is  of  the  nature  of  a  "local 
improvement"  (part  to  be  paid  by  the  municipality  and  part  by  the  owners 
of  the  properties  to  be  benefited)  there  is  an  added  reason  for  refraining 
from  issuing  the  debentures  till  the  completion  of  the  work.    In  such  case 

23 


the  construction  of  the  improvement  is  in  the  nature  of  a  partnership,  and, 
properly,  the  greatest  care  should  be  taken  to  keep  the  transaction  separate 
and  free  from  other  matters  of  a  like  nature,  and  from  works  in  which  only 
the  corporation  is  interested.  I  use  the  word  "properly"  advisedly,  for  un- 
fortunately the  average  municipal  official  is  not  careful  in  this  regard  and 
works  are  often  undertaken  and  carried  to  completion,  moneys  advanced, 
and  debentures  sold  without  the  slightest  regard  being  had  to  the  equities 
of  the  various  interests  concerned. 

I  have  been  unable  to  find  any  method  of  procedure  in  undertakings 
of  this  kind  better  than  the  one  I  shall  shortly  outline.  It  certainly  has  the 
advantage  of  simplicity.  When  the  funds  are  required,  arrangements  are 
made  for  special  advance  from  the  bankers  sufficient  to  meet  the  cost  of 
the  proposed  undertaking,  this  advance  to  be  carried  in  the  way  of  an  over- 
drawn account,  guaranteed  by  a  demand  note,  for  the  approximate  re- 
quirement, if  the  bank  rules  require  it.  All  checks  and  payments  made  on 
account  of  that  particular  work,  are  entered  to  a  special  account,  and  in- 
terest is  periodically  charged  upon  the  advances.  When  the  work  has  been 
completed,  and  the  actual  cost  arrived  at,  the  time  for  the  disposal  of  the 
debentures  will  have  come,  and  these  will  then  be  issued  to  an  amount  ex- 
actly sufficient  to  cover  the  cost  of  the  work. 

SPECIAL    ASSESSMENT    REGISTER. 

The  methods  of  keeping  the  records  of  these  local  improvement  assess- 
ments are  almost  as  varied  as  are  the  classes  of  work  done  under  this 
system. 

City  of  W/ndsoro 

Register  c£  Special  Rales  bviedonder»1tTe  autfTopityof 
lofel  cost"  of  iTTippovement  $>  Awual  Rayrr^ot  # 


3trcdt 

l    +II   rfceT 
LoTponW 



ce>! 

IS  lib 

To-tel 
Assessrfft 

Total   _ 
Qommcjf'q 

N£arc5 

ioQun 

Annual 
Paymt 

Grty^  fnopor»tror>4p 

FVafcpa^e 


C/fy    cf  Yl/znc/sor* 

Law  Nlo.  Rassed  l&O 


DcbcTtaPCs  issued  <jr?der=  Dy-Law         Ssirrl 


Record  ot"Cornrnula~tToo  paid  op  lolio  entered  irjColleooPs  Roll  d\  02c))  yeA*8 
i       2.     3     4      S    &    ~7     3     &    lO    1   1    12    1^    !•<*    1-5    10    \~7    IS    1©  20 

Form  27. — Special  Assessment  Register. 
24 


Where  there  are  not  more  than  a  score  of  assessments  which  it  is  neces- 
sary to  keep  separate,  an  individual  column  for  each  work  in  the  collec- 
tor's roll  is  all  that  is  necessary.  Where  the  works  exceed  the  number 
mentioned,  then  it  becomes  necessary  to  introduce  a  special  assessment 
register.  The  form  supplied  here  (27)  is  as  complete  and  simple  as  any 
that  can  be  devised.  A  page  is  given  to  each  improvement ;  all  the  particu- 
lars as  to  the  name  of  work,  its  nature,  the  total  cost  thereof,  the  number 
of  levies,  the  years  in  which  the  collections  are  to  be  made,  the  number  of 
the  by-law  under  which  constructed,  the  number  of  the  consolidating  by- 
law (if  consolidated  for  the  purpose  of  issuing  debentures),  the  amount  of 
premium  received  at  sale  of  the  bonds,  the  amount  of  each  individual 
assessment;  information  as  to  commutations,  all  these  are  recorded  in 
methodical  fashion.  A  column  is  supplied  for  each  individual  year,  and  in 
this  is  entered  opposite  each  name  the  pro-number,  against  which  the 
amount  has  been  placed  in  the  general  collector's  roll.  By  a  reference  to 
the  form  given  herewith  it  will  be  seen  that  a  column  has  been  provided 
for  the  principal  items  which  enter  into  the  local  improvement  system, 
as  sewer  tax,  pavement  tax,  sidewalk  tax,  street  sprinlking  rate.  In  the 
upper  left  hand  corner  of  the  space  for  each  entry  in  the  collector's  roll 
should  be  entered  the  folio  of  the  special  assessment  register  from  which 
the  charge  has  been  taken. 


CHAPTER  XL 
Public  Libraries. 


The  form  of  accounts  best  suited  to  the  use  of  libraries  is  presented 
below.  The  system  is  simple,  yet  absolutely  complete.  Within  the 
one  book  is  combined  the  ordinary  cash  book,  journal  and  ledger. 
The  fullest  information  concerning  the  accounts  is  available  at  a  moment's 
notice;  an  easy  method  of  proving  the  correctness  of  the  clerical  work  is 
provided,  and  the  whole  business  of  the  institution  appears  on  the  page 
containing  the  final  entry.  But  few  instructions  are  required  to  enable  the 
average  person,  even  though  not  skilled  in  book-keeping,  to  keep  the 
accounts  by  this  method. 

The  accompanying  illustration,  written  up  and  worked  out  to  an 
abstract,  shows  the  manner  of  keeping  the  accounts  of  a  public  library, 
and  is  prepared  in  accordance  with  the  requirements  for  the  returns  which 
must  annually  be  made  to  the  Minister  of  Education. 

ABSTRACT. 

Jan.       1.     Balance  from  previous   year    $  33  00 

Members'  fees    12  00 

April  30.     Leg.  and  Mun.  grants   330  00 

Evening  classes    50  00 

$425  00 

25 


April  30. 


DISBURSEMENTS. 

Rent,  light,  etc $  1 5  °° 

Salaries    3°  00 

Books  (not  fiction)    120  00 

Books  (fiction)    57  03 

Binding 7  00 

Evening  classes    30  00 

$259  33 
Balance  on  hand   165  67 


$425  00 


All  cash  receipts  are  entered  under  their  proper  date  and  classification, 
and  are  carried  to  the  "total"  column  and  added  in  with  each  entry,  so  that 
the  sum  of  the  total  column  represents  at  all  times  the'  total  amount  of 
cash  received.  As  these  entries  are  made  the  amount  in  each  case  is 
added  into  the  "balance  cash  on  hand"  column. 

All  disbursements  are  entered  under  proper  date,  and  in  the  column 
headed  "amount,"  after  which  the  amount  is  deducted  from  the  "balance 
cash  on  hand."  The  amount  of  the  disbursement  is  then  carried  over  to  the 
"distribution  of  accounts,"  and  is  entered  in  the  proper  column  or  columns. 
This  is,  or  these  are,  then  carried  to  the  "total"  column,  on  the  right  hand 
side,  and  succeeding  amounts  are  added  in  from  time  to  time  as  the  entries 
are 'made.  The  sum  of  these  represents  the  total  of  the  disbursements. 
To  prove  the  correctness  of  the  clerical  work,  add  the  "totals"  of  the  distri- 
bution page  to  the  "balance  cash  on  hand,"  and  the  sum  should  (if  no  errors 
have  been  made)  equal  the  total  of  the  receipts. 


C,„     ..C...-T,                                                                         [                             0„.^...-.«T»                            j 

ruT-ie.  t.vn    ....   ....-.„  ~t. 

.... 

■._: 

.. 

:■ 

.... 

...... 

_•=. 

SUS 

.- 

JS, 

- 

....„ 

. 

r"*- 

e£L_ 

ft"*'     ft""' 

— 

jti&ut*, 1 

, 

. 

- 

7  — 

„ 

—-_: 

Form  28.— Public  Library  Records. 

In  carrying  over  the  accounts  from  page  to  page,  the  whole  work  must 
of  necessity  prove  itself  in  a  number  of  different  ways.  The  sum  of  the 
footings  of  the  receipts  will  equal  the  "total ;"  the  sum  of  the  footings  of  the 
"distribution"  page  will  equal  the  "total."  The  sum  of  the  "totals"  and  the 
"balance  cash  on  hand"  must  equal  the  "total  receipts."  These  and  other 
proofs  which  may  be  applied  make  it  next  to  impossible  to  make  a  mistake, 
unless  wilfully,  in  transferring  the  accounts  from  one  page  to  the  next. 

Where  greater  elaboration  of  detail  is  wished,  the  number  of  columns 

can  be  increased,  and  the  1 k  made  of  the  necessary  width  to  accommodate 

them. 


20 


CHAPTER  XII. 

School  Accounts. 

It  is  as  necessary  that  the  accounts  of  the  thousands  of  school  sec- 
tions throughout  the  land,  should  be  properly  and  accurately  kept,  as  with 
any  other  branch  of  public  accounts.  To  this  end  what  can  be  better 
than  the  adoption  of  a  uniform  system  of  accounts.  In  the  form  below 
will  be  found  the  principles  of  a  simple,  yet  excellent  system.  It  is  along 
the  same  lines  as  the  cash  accounts  for  municipalities,  and  public  libraries 
providing  a  positive  and  certain  internal  check.  For  details  as  to  the  keep- 
ing of  this  book,  see  chapter  upon  "Public  Libraries."  The  principles  in 
both  cases  are  identical. 


board      or 


- 

CASI-l          BECtlPTS 

D.+. 

fNarr^   and  (SnT.cuUr* 

Mo 

l?« 

Grorvt 

GrTj 

"Ibwrpp 

Local 

Mo^'cpl 

INo 

5uJ~ 

tJJ 

— 

- 

school     e>o> 


=«„                       WWMCrs.TJ.        '              """      ' 

Dat, 

Na.Ty.viJa^Lv. 

v„„,t„ 

D„lo~ 

Stalan.* 

r-.,i.„.-. 

6.35;.. 

r~ 

c*w 

'■;■]■'■■' 

^£. 

1 

n.M^ 

5ujr,« 

P. 

TSLI 

Form  29. — Public  School  Accounts. 


CHAPTER  XIII. 
Debentures. 


Debentures  and  bonds  are  ordinarily  issued  upon  either  one  of  two 
methods :  "Sinking  Fund"  and  "Instalment  or  Annuity."  Which  of  these 
methods  is  the  better  has  been  a  moot  question,  and  it  depends  altogether 
upon  whether  you  are  the  purchaser  or  the  seller  of  the  securities  which 
position  you  may  feel  disposed  to  take.  For  myself  I  have  very  decided 
views  upon  the  subject,  looking  at  it  from  the  standpoint  of  the  muni- 
cipality. 

SINKING  FUND. 

In  the  case  of  "sinking  fund"  debentures,  no  part  of  the  principal  is 
repaid  to  the  holder  or  purchaser  during  the  currency  of  the  bonds.  The 
full  amount  of  interest  and  a  portion  of  the  principal  is  annually  collected. 
The  interest  is  paid  to  the  debenture  holder.  The  principal  is  paid  into  an 
account  known  as  the  sinking  fund,  which  fund  must  be  made  to  earn  a 
rate  of  interest  equal  to  that  calculated  at  the  time  of  issuing  and  this  is 
compounded  yearly  or  half  yearly  during  the  whole  period  of  existence  of 
the  debt,  so  that  at  maturity  of  the  debentures  there  will  be  in  this  fund 
just  sufficient  to  repay  the  principal.  With  the  rates  of  interest  varying, 
it  so  happens  that  often  it  is  not  possible  to  make  the  sinking  fund  earn  the 
amount  contemplated,  or  it  may  be  that  too  high  a  rate  of  interest  was 
allowed  in  the  calculation. 


27 


Each  year,  before  placing  in  the  estimates  the  amount  required  to  be 
raised  for  the  sinking  fund,  a  valuation  should  be  made  to  ascertain  whether 
the  existing  investments  have  amounted  to  the  sum  originally  intended  as 
that  which  should  be  on  hand  at  that  date.  If  deficient  it  must  be  aug- 
mented by  adding  the  necessary  amount  to  the  ordinary  yearly  appro- 
priation. 

If  precautions  are  taken,  and  fractional  adjustments  are  made  from 
year  to  year,  there  will  be  no  possibility  of  finding  the  sinking  fund  short 
when  the  debentures  mature. 

A  common  practice  is  to  calculate  the  interest  earning  power  of  the 
sinking  fund  at  the  same  rate  as  the  debentures  bear,  and  this  is  a  pit  into 
which  many  municipalities  stumble.  There  are  many  reasons  why  it  is 
not  possible  to  make  the  sinking  fund  earn  interest  equal  to  that  which 
must  be  paid  on  the  debentures,  chief  among  which  is  lack  of  investment. 
The  amounts  being  small  and  accumulating  annually,  it  is  impossible  to 
keep  the  fund  continually  invested  at  a  rate  of  interest  higher  than  that 
which  can  be  obtained  by  deposit  in  the  ordinary  savings  bank.  It  follows 
that  no  matter  what  rate  of  interest  it  may  be  necessary  to  make  the  deben- 
tures bear,  it  is  well  that  the  sinking  fund's  interest-earning  power  should 
not  be  calculated  at  a  rate  higher  than  ordinary  savings  bank  interest. 

INSTALLMENT  OR  ANNUITY. 

The  "instalment"  or  "sliding  scale"  debentures  are  figured  so  that  equal 
payments  during  the  period  which  the  debentures  have  to  run  of  principal 
and  interest,  will  be  made.  The  first  year's  payment  will  obviously  be 
largely  interest  and  very  little  principal.  The  second,  a  little  less  interest 
and  more  principal.  Each  year  the  interest  decreases  and  the  principal 
increases,  until  in  the  final  year  the  payment  is  mostly  principal.  It  will 
be  observed  that  the  difference  between  the  two  forms  of  debenture  is, 
that  in  the  first  case  the  investor  accepts  only  the  interest  earned  each  year, 
leaving  the  principal  in  the  hands  of  the  municipality  for  reinvestment.  In 
the  second  case  the  investor  is  himself  under  the  necessity  of  finding  his 
own  source  of  reinvestment  for  the  principal  which  he  receives  year  by  year. 

The  system  of  sinking  funds  originated  because  investors  were  averse 
to  buying  debentures  which  provided  for  the  return  yearly  of  a  portion  of 
the  principal,  necessitating  the  trouble  of  the  reinvestment  of  small 
amounts.  At  any  rate,  debentures  of  such  a  character  brought  a  less  price 
in  the  market,  and  hence  the  introduction  of  the  sinking  fund  idea,  which 
placed  the  onus  of  reinvestment  upon  the  shoulders  of  the  persons  or 
corporations  obtaining  the  loan,  thus  giving  the  capitalist  the  advantage  of 
a  longer  and,  to  him,  more  satisfactory  investment.  This  condition  of 
affairs  originated  when  rates  of  interest  were  much  higher  than  now,  and 
money  less  plentiful.  The  day  of  the  sinking  fund  is  past,  however,  the 
difference  in  the  price  obtainable  for  debentures  of  the  two  kinds  being 
so  slight  that  the  trouble  of  maintaining  the  sinking  fund  largely  exceeds 
the  paltry  difference  in  the  proceeds  of  the  sales.  With  a  thorough  sense 
of  the  responsibility  attaching  to  the  position  which  I  take,  I  have  no 
hesitation  in  saying  that  the  sinking  fund  is  a  curse  to  the  average  munici- 
pality. Lack  of  knowledge  of  finances,  inability  to  keep  the  sinking  fund 
profitably  invested,  the  manipulation  of  the  fund  by  designing  and  dis- 
honest  officials,   ignorance    in    computing   the   earning   power;   these   arc 

•is 


principally  the  causes  which  lead  to  the  conclusion  voiced  in  the  preceding 
sentence.  In  these  days  of  cheap  money,  with  capitalists  on  the  alert  for 
safe  investments,  and  with  the  keen  competition  that  exists  in  the  money 
market,  it  makes  but  little  difference  which  kind  of  debenture  is  issued, 
in-so-far  as  the  sale  of  the  securities  is  concerned.  Indeed,  however,  as  the 
following  illustration  will  show,  the  issuing  of  sinking  fund  debentures  is 
the  more  expensive  method  of  providing  funds :  Let  us  take  a  loan  of 
$25,000  for  twenty  years  at  4  per  cent.  On  the  annuity  plan  the  sum  of 
$1,839.55  per  annum  will  require  to  be  raised  for  twenty  years,  to  cover 
both  principal  and  interest.  On  the  sinking  fund  plan  your  annual  interest 
payment  will  be  $1,000.00,  and  for  the  sinking  fund,  calculated  at  3%, 
$930.40,  or  $1,930.40  in  all — which  is  $90.85  in  excess  of  your  requirements 
under  the  annuity.  This  means,  with  interest,  compounded,  for  twenty 
years,  a  direct  loss  to  the  rate-payers  of  over  $2,500.00,  or  10%  of  the 
entire  loan.  And  even  here  we  are  pre-supposing  the  prompt  deposit  on 
the  exact  date  ,  of  the  annual  amount  in  the  sinking  fund,  and  that  not  one 
day  of  interest-earning  power  shall  be  lost,  something  which  we  know  to 
be  so  rare  as  to  be  practically  impossible  in  the  average  municipality. 

THE  RATE  OF  INTEREST. 

Many  municipalities  are  in  the  habit  of  issuing  debentures  bearing  a 
higher  rate  of  interest  than  the  money  can  be  obtained  for.  This,  presum- 
ably, is  done  in  order  that  a  good  premium  may  be  obtained,  the  officials 
laboring  under  the  misconception  that  the  obtaining  of  a  large  premium 
gives  the  public  a  more  exalted  idea  of  the  excellence  of  credit  which 
the  municipality  enjoys  in  the  financial  world.  A  careful  study  of  the 
money  markets  at  the  time  the  debentures  are  ripe  for  sale  will  enable  the 
officials  charged  with  that  duty  to  decide  pretty  accurately  upon  the  lowest 
rate  of  interest  which  the  debentures  may  be  made  to  bear,  in  order  to 
find  a  purchaser  at  par.  A  low  rate  of  interest  and  no  premium  is  much 
preferable  to  a  large  premium  with  a  corresponding  increase  in  the  interest 
rate.  As  a  matter  of  fact  investors  often  take  advantage  of  the  ignorance 
of  officials  not  familiar  with  calculations  of  this  character,  and,,  under 
the  cloak  of  an  apparently  large  premium,  they  pay  less  for  the  debentures 
than  if  they  had  been  compelled  to  bid  on  an  issue  bearing  the  current 
rate  of  interest  and  netting  par. 

THE  QUESTION  OF  PREMIUMS. 

There  is  also  a  greater  evil  than  this  in  connection  with  the  question  of 
premiums.  Many  councils  and  officials  are  possessed  of  the  mistaken  idea 
that  premiums  of  whatever  sort  are  the  cimmon  property  of  the  munici- 
pality. The  consequence  is  that  in  the  case  of  local  improvements,  the 
general  funds  receive  the  benefit  of  the  premium  while  the  interested  prop- 
erty owners  pay  the  piper.  It  is  obvious,  therefore,  that  the  obtaining  of  a 
premium  is  not  always  a  benefit  to  those  most  immediately  concerned. 
The  natural  application  of  any  premium  or  surplus  arising  out  of  the 
sale  of  debentures  issued  on  other  than  general  account,  is  toward  the 
payment  of  the  first  principal  or  interest  which  falls  due  on  account  of* 
these  particular  debentures,  a  pro-rata  reduction  being  made  in  the  assess- 
ments against  the  various  property  holders  for  that  particular  year. 

29 


SINKING   FUND   INVESTMENTS. 

The  statute  authorizes  municipalities  to  invest  the  sinking  funds  in 
government  securities,  municipal  debentures,  their  own  or  their  neighbors, 
and  first  mortgages,  at  the  pleasure  of  the  investing  body.  The  fullest 
information  should  be  kept  of  all  such  investments,  and  a  ledger  should  be 
provided,  which  will  furnish  all  the  facts.  It  matters  not  particularly 
what  the  form,  if  information  be  given  as  to  date  of  loan,  amount,  descrip- 
tion of  property,  certificate  of  valuation,  and  of  solicitor,  and  such  other 
details  as  the  circumstances  surrounding  each  particular  case,  and  the 
nature  of  the  investment,  may  seem  to  require. 


CHAPTER  XIV. 
Tabular  Computations. 


In  every  municipal  corporation  public  works  are  undertaken  requiring 
the  issuing  of  debentures  or  bonds  to  provide  the  necessary  funds  for  the 
carrying  out  of  the  works.  It  becomes  of  the  greatest  importance,  there- 
fore, that  the  officials  charged  with  the  issuing  of  these  securities  should 
be  possessed  of  the  information  to  enable  them  to  quickly  and  correctly 
make  the  necessary  calculations  as  to  the  annual  amounts  to  be  levied. 

SINKING  FUND  TABLES. 

In  the  Sinking  Fund  Table  herewith  is  shown  the  amount  of  sinking 
fund  necessary  to  be  set  aside  annually  to  provide  the  required  amount  to 
any  rate  of  interest  from  2  to  6  per  cent,  for  any  number  of  years,  at  the 
end  of  which  debentures  are  ordinarily  made  payable.  Purchasers  of  deben- 
tures are,  by  recourse  to  this  table,  enabled  to  ascertain  at  a  glance  whether 
proper  provision  has  been  made  in  the  by-law,  under  which  the  bonds  or 
debentures  have  been  issued,  for  the  necessary  amount  of  sinking  fund. 

INSTALMENT   OR   ANNUITY  TABLES. 

By  far  the  greater  part  of  the  debentures  issued  at  the  present  time 
are  upon  the  instalment  or  annuity  plan.  In  this  way  an  equal  annual 
payment  is  made.  It  is  thus  necessary  to  know  what  amount  of  principal 
must  be  paid  off  in  each  year,  in  order  that  the  principal  so  paid,  together 
with  the  interest,  shall  each  year  amount  to  the  same  sum.  The  tables 
which  are  presented  in  this  volume  are  prepared  to  show  the  exact  amount 
of  interest  and  principal  respectively,  payable  each  year,  in  order  to 
reduce  to  an  equal  annual  sum  the  amount  to  be  levied.  To  financiers 
generally,  and  to  municipal  clerks  and  engineers  especially  these  tables 
will  prove  of  inestimable  value,  enabling  them  to  make  the  necessary 
calculations  required  in  the  issuing  of  debentures  or  bonds,  in  any  sum, 
for  periods  of  5,  10,  15,  20,  25,  and  30  years,  at  rates  of  interest  of  2,  2l/2,  3, 
y/2,  4,  4l/2,  5,  $y2  and  6  per  cent. 

Special  tables  have  been  prepared  for  2,  3,  and  4  years,  at  rates  of  inter- 
est of  2,  2^4,  3,  y/2,  4,  4J/2,  5,  5J/2  and  6  per  cent.  These  will  be  found 
useful  more  particularly  in  the  case  of  school  sections,  where  short  term 
debentures  are  frequently  issued. 

30 


COMPOUND  INTEREST  TABLE. 

(One  dollar  interest.) 

Included  in  the  list  of  tabular  computations  is  a  table  which  shows 
readily  the  sum  to  which  One  dollar  principal  will  increase  at  compound 
interest  in  any  number  of  years  from  I  to  40,  at  rates  of  2,  2.y2,  3,  2>l/2,  4, 
Al/2,  5,  SlA  and  6  per  cent,  per  annum.  Instructions  for  the  finding  of 
the  sum  to  which  any  given  amount  will  increase  at  compound  interest 
at  any  of  the  rates  of  interest,  and  number  of  years  expressed  in  the  table, 
are  also  given. 

COMPOUND  INTEREST  TABLE. 

(One  dollar  deposited  at  end  of  each  year.) 

It  frequently  becomes  a  necessity  to  ascertain  whether  or  not  a  sinking 
fund  is  being  maintained  at  its  proper  standard.  To  do  this  in  the  ordinary 
course  means  a  deal  of  figuring.  By  the  use  of  the  table  appended  the 
proper  status  of  the  fund  at  the  end  of  any  year  may  be  obtained  by  a 
simple  sum  in  multiplication  as  exemplified  at  foot  of  this  table. 

PROOF  OF  ANNUITY  PAYMENTS. 

Purchasers  of  bonds  and  debentures  invariably  require  to  satisfy  them- 
selves of  the  correctness  of  the  sum  provided  in  the  by-laws  as  being 
required  to  be  raised  annually  to  meet  the  interest  and  principal  of  the 
debentures  for  which  they  are  negotiating.  The  table  on  page  37  furnishes 
a  simple  means  to  this  end;  and  it  may  furthermore  be  used  to  prove 
the  correctness  of  his  calculations  by  the  clerk  or  financier  issuing  the  bonds 
or  debentures. 

TABLE    TO    SHOW    THE    INTEREST-EARNING    POWER    OF    STOCKS,    BONDS    AND 

DEBENTURES  BOUGHT  AT  VARyiNG  PRICES,  EITHER  ABOVE 

OR  BELOW   PAR. 

In  these  days  of  close  competition  in  the  money  markets  of  the  world, 
the  purchaser  of  securities  is  called  upon  at  almost  every  turn  to  bid  for 
bonds,  stocks  and  debentures.  The  table  on  page  38  will  enable  such  to  tell 
at  a  glance  the  interest  which  investments  will  net,  at  varying  purchase 
prices  either  at  a  discount  or  a  premium,  ranging  from  50  to  150.  The  rule 
for  ascertaining  the  value  at  any  rate  not  included  in  the  table  is  also  given. 

These  tables  are  printed  from  plates  revised  by  the  author,  so  that 
there  need  be  no  question  as  to  their  correctness. 

F.   H.   MACPHERSON,  C.  A. 


::i 


Debenture  Instalment  Tables, 


Showing  amount  of  Principal  to  be  paid  each  year  in  order  to  reduce  to  an 

equal  sum  the  amount  to  be  levied  each  year  for  payment  of 

Principal  and  Interest  on  an  issue  of  $1,000,000. 


2  Per  Cent.— 5  Years. 

Debentures  bearing  2  per  cent. 

Interest,  Payable  in  5 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$212,158.41. 


2  Per  Cent— 15  Years. 

Debentures  bearing  2  per  cent. 

Interest,  Payable  in  15 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$77,825.47. 


2  Per  Cent.— 20  Years. 

Debentures  bearing  2  per  cent. 

Interest,  Payable  in  20 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$61,156.72. 


Each 

Year. 


Interest. 


Principal. 


Each 
Year. 


Interest. 


Principal. 


Each 
Year. 


Interest. 


Principal. 


$20000  00 
16156  83 
12236  80 
8238  36 
4160  06 


$192158  41 
196001  58 
199921  61 
203920  05 
207998  35 


$1000000  00 


2  Per  Cent.— 10  Years. 

Debentures  bearing  2  per  cent. 

Interest,  Payable  in  10 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$111,326.54. 


Each 
Year. 


Interest. 


$20000  00 

18173  49 

16310  43 

14410  10 

12471  78 

10494  68 

8478  04 

6421  07 

4322  96 

2182  85 


Principal. 


$  91326  54 
93153  05 
95016  11 
96916  44 
98854  76 
100831  86 
102848  50 
104905  47 
107003  58 
109143  69 


$20000  00 

18843  49 

17663  85 

16460  61 

15233  32 

13981  48 

12704  60 

11402  18 

10073  71 

8718  68 

7336  54 

5926  76 

4488  79 

3022  06 

1525  98 


$57825  47 
58981  98 
60161  62 
61364  86 
62592  15 
63843  99 
65120  87 
66423  29 
67751  76 
69106  79 
70488  93 
71898  71 
73336  68 
74803  41 
76299  49 


$1000000  00 


$1000000  00 


$20000  00 

19176  86 

18337  27 

17480  98 

16607  36 

15716  38 

14807  57 

13880  59 

12935  06 

11970  63 

10986  91 

9983  51 

8960  05 

7916  12 

6851  31 

5765  20 

4657  37 

3527  38 

2374  79 

1199  06 


$41156  72 
41979  86 
42819  45 
43675  74 
44549  36 
45440  34 
46349  15 
47276  13 
48221  66 
49186  09 
50169  81 
51173  21 
52196  67 
53240  60 
54305  41 
55391  52 
56499  35 
57629  34 
58781  93 
59957  66 

$1000000  00 


By  giving  the  figures  for  an  issue  of  $1000,000,  exact  amounts  are  ex- 
hibited. For  amounts  less  than  a  million  it  is  only  necessary  to  take  the  same 
proportion  of  the  above  sums  thus  : 

$10,000  requires  exactly  one-hundreth  of  above  figures,  viz.  :  For  10 
years  at  2  per  cent  : 

1st  Payment— Interest,  $200.00;  Principal,  $913.26  ;  total,  $1113.26. 

10th  Payment — Interest,  $21.83;  Principal,  $1091.43;  total,  $1113.26. 


2  Per  Cemt.— 25  Years 

2  Per  Cent. -30  Year* 

2  1-2  Per  Cent.-5  Years. 

Debentures  bearing  2  per  cent. 

Debentures  bearu 

g  2  per  cent. 

Debentures  bearing  2\  per  cent. 

Interest.  Payable  in  25 

I nt n  est,  Payable  in  30 

Interest,  Payable  in  5 

\ 

early  Instalments. 

\1.  ANN!"  U.  P  WMENT, 

EQD 

'early  Instalments. 

Yearly  Instalments. 

EQU; 

VL  ANNUAL 

PAYMENT. 

EylAL  ANNUAL  PAYMENT. 

$51, 220. 44. 

$44,649.93 

$215. 246. 88. 

Each 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

1 

$20000  00 

$31220  44 

! 

$20000  00 

$24649  93 

1 

$25000  00 

$190246  88 

2 

19375  59 

31844  85 

2 

19507  00 

25142  93 

2 

20243  S3 

195003  05 

3 

18738  00 

32481  75 

3 

19004  14 

25645  79 

3 

15368  75 

199878  13 

4 

18089  06 

33131  38 

4 

18491  23 

26158  70 

4 

10371  80 

204875  08 

17426  43 

33794  01 

5 

17968  05 
17434  41 

26681  88 
27215  52 

5 

5250  02 

209996  86 

6 

16750  54 

34469  90 

6 

7 

16061  15 
15357  96 

35159  29 
35862  48 

7 
8 

16890  10 
16334  91 

27759  83 
28315  02 

$1000000  00 

g 

9 

14640  71 

36579  73 

9 

15768  61 

28881  32 

2  1-2  Per  Cent.— 10  Years. 

10 

13909  12 

37311  32 

10 

15190  98 

29458  95 

Debentures  bearing  2h  per  cent. 
Interest,  Payable  in  10 

11 

13162  90 

38057  54 

11 

14601  80 

30048  13 

12 

12401  74 

38818  70 

12 

14000  84 

30649  09 

yearly  Instalments. 

13 

11625  37 

39595  07 

13 

13387  86 

31262  07 

14 

10833  47 

40386  97 

14 

12762  62 

31887  31 

EQUAL  ANNUAL  PAYMENT, 

15 

10025  73 
9201  84 

41194  71 
42018  60 

15 
16 

12124  87 
11474  37 

32525  06 
33175  56 

$114,258.78. 

16 

17 

8361  46 

42858  98 

17 

10810  86 

33839  07 

Each 

Interest. 

Principal. 

18 
19 

7504  28 
6629  96 

43716  16 
44590  48 

18 
19 

10134  07 
9443  76 

34515  86 
35206  17 

Year. 

20 

5738  15 

45482  29 

20 

8739  64 

35910  29 

1 

$25000  00 

$89258  78 

21 

4828  50 

46391  94 

21 

8021  43 

36628  50 

2 

22768  53 

91490  25 

22 

3900  67 

47319  77 

22 

7288  86 

37361  07 

3 

20481  27 

93777  51 

23 

2954  27 

48266  17 

23 

6541  64 

38108  29 

4 

18136  84 

96121  94 

24 

1988  95 

49231  49 

24 

5779  47 

38870  46 

5 

15733  79 

98524  99 

25 

1004  46 

50215  98 

25 

5002  06 

39647  87 

6 

13270  66 

100988  12 

26 

27 

4209  11 
3400  29 

40440  82 
41249  64 

7 

10745  96 

103512  82 

$1000000  00 

8 
9 
10 

8158  14 
5505  62 
2786  99 

106100  64 
108753  16 
111471  79 

2  1- 

2  Per  Cent. 

-25  l'enrs. 

28 
29 

2575  30 
1733  80 

875  82 

42074  63 
42916  13 

Deben 

ures  bear  in 
,erest,  Pays 
rearly  Insta 

g  2\  per  cent, 
ible  in  25 
lments. 

43774  11 

In 

30 

$1000000  00 

$1000000  00 

: 

2  1-2  Per  Cent.— 15  Years. 

Debentures  bearing  2J  per  cent. 
Interest,  Payable  in  15 

EQU 

Ai  ANNUAL 

$54,275.  < 

PAYMENT, 
13. 

21 

Debent 

In 

1 

-2  Per  Cent 

ures  bearin 
terest,  Pay 
Nearly  Insta 

20  Years. 

^  2i  per  cent, 
ible  in  20 
lments. 

Each 
Year. 

Interest. 

Principal. 

Yearly  Instalments. 

EQU 

al  ANNUAL 
$64,147 

PAYMENT, 

.13 

EQUAL  ANNUAL  PAYMENT, 

1 
2 

$25000  00 
24268  10 
23517  90 
22748  95 
21960  78 
21152  90 

$29275  93 
30007  83 
30758  03 
31526  98 
32315  15 
33123  03 

$80,766.45. 

3 
4 
5 
6 

Each 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

1 

$25000  00 

$39147  13 

1 

$25000  00 

$55766  45 

7 

20324  82 

33951  11 

2 

24H21  32 

40125  81 

2 

23605  84 

57160  61 

8 

19476  04 

34799  89 

3 

23018  18 

4112s  95 

3 

22176  82 

58589  63 

9 

18606  05 

35600  88 

4 

21989  95 

42157  18 

4 

20712  08 

00054  37 

10 

17714  30 

36561  63 

5 

20936  02 

43211  11 

5 

102 lo  72 

61555  73 

11 

16800  26 

37475  67 

6 

19855  75 

44291  38 

6 

17071  83 

63094  62 

12 

15863  37 

38412  56 

7 

18748  46 

45398  67 

7 

16094  46 

64671  99 

13 

I  1903  05 

39372  88 

8 

17613  49 

46533  04 

8 

14477  W3 

66288  70 

14 

L3918  73 

40357  20 

9 

16450  15 

47696  98 

9 

12820  45 

67046  00 

15 

12909  .ho 

41300  13 

10 

L5257  73 

48889  40 

10 

11121  80 

69644  65 

16 

!  is;.",  65 

42400  28 

11 

I1D3.-.  49 

50111  04 

11 

03SO  OS 

713S5  77 

17 

10H15  64 

43460  29 

12 

L2782  70 

51364  43 

12 

7500  03 

73170  42 

18 

9729  13 

14546  80 

13 

1140S  59 

52648  54 

13 

5700  77 

74999  68 

19 

8615  46 

45660  17 

14 

10182  38 

.-,.•{001  7--> 

14 

3891  78 

76874  67 

20 

7  tT-i  95 

46801  98 

15 

8833  26 

55313  S7 

15 

1000  83 

78796  02 

21 

6303  90 

17072  03 

16 

7450  11 

.-.oooo  72 



22 

5104  60 
3875  32 

10171  33 
50400  01 

17 
18 

6032  99 
4580  ll 

58114  14 
69566  99 

SIOOOOOO  DO 

23 

24 

2815  30 

5iooo  63 

19 

3090  96 

61056  17 

25 

L324  25 

52951  68 

20 

L564  63 

62582  50 

$111(1(1(1(10  DO 

11000000  00 

ftl- 

J  Per  Cent. - 

:»t  Years. 

3  l'er  Cent.— 5  Years. 

3  Per  Cent.— 30  Years 

Debentures  bearing 

2!  per  cent. 

Debentures  bearing  3  per  cent. 
Interest,  Payable  in  5 

Debentures  bearing 

3  per  cent. 

Interest,  Payable  in  30 

Interest,  Paya 

»le  in  30 

Yearly  Insta 

ments. 

PAYMENT. 

Y 

EQU.A 

early  Insta 

ments. 

PAYMENT, 

Y 

EQUA 

early  Instalments. 

EQUAL  ANNUAL 

L  ANNUAL 

l,  ANNUAL  -PAYMENT. 

847.777.65. 

$218,354.58. 

851  019,26. 

Each 
Year. 

Interest. 

Principal. 

Kaeh 
Year. 

Interest. 

Principal. 

Each 
\  ear. 

Interest. 

Principal. 

1 

$25000  00 

$22777  65 

1 

130000  00 

$188354  58 

1 

£30000  00 

$21019  26 

2 

24430  56 

23347  09 

2 

•24349  36 

194005  22 

2 

29369  42 

•J  1049  84 

3 

23846  88 

23930  77 

3 

18529  20 

199S25  38 

3 

28719  92 

22299  34 

4 

232-18  61 

24529  04 

4 

12534  44 

205820  14 

4 

28050  94 

22968  32 

5 

22635  37 

25142  28 

5 

6359  90 

211994  68 

5 

27361  so 

23657  37 

22006  83 

25770  82 

6 

26652  17 

24367  09 

6 

7 

21362  56 

26415  09 

SI 000000  00 

7 

25921  10 

25098  10 

8 

20702  18 

27075  47 

8 

25168  22 

25851  04 

9 

20025  29 

27752  36 

3  Per  Cent.— 10  Years. 

9 

24392  68 

26626  58 

10 

19331  49 

28446  16 

Debentures  bearing  3  per  cent. 
Interest,  Payable  in  10 

10 

23593  89 

27425  37 

11 

18620  33 

29157  32 

11 

22771  13 

28248  13 

12 

17891  40 

29886  25 

Yearly  Instalments. 

12 

21923  68 

29095  58 

13 

17144  24 

30633  41 

13 

21050  81 

29968  45 

14 

16378  41 

31399  24 

EQUAL  ANNUAL  PAYMENT, 

14 

20151  76 

30867  50 

15 

15593  43 

32184  22 

$117,230.51. 

15 

19225  74 

31793  52 

16 
17 

14788  82 
13964  10 

32988  83 
33813  55 

16 

18271  93 
17289  51 

32747  33 

Each 

Interest. 

Principal. 

17 

33729  75 

18 

13110  76 

34658  89 

Year. 

18 
19 
20 

16277  62 
15235  37 
14161  86 

34741  64 
35783  89 
36857  40 

19 
20 

12252  29 
11364  16 

35525  36 
36413  49 

1 

$30000  00 

$87230  51 

21 

10453  82 

37323  83 

2 

27383  08 

89847  43 

21 

13056  14 

37963  12 

22 

9520  72 

38256  93 

3 

24687  66 

92542  85 

22 

11917  24 

39102  02 

23 

8564  30 

39213  35 

4 

21911  38 

95319  13 

23 

1(1744  18 

40275  08 

24 

7583  96 

40193  69 

5 

19051  80 

98178  71 

24 

9535  93 

41483  33 

25 

6579  12 

41198  53 

6 

16106  44 

101124  07 

25 

8291  43 

42727  83 

26 

5549  16 

42228  49 

7 

13072  72 

104157  79 

26 

7009  57 

44009  67 

27 

4493  45 

43284  20 

8 

9947  98 

107282  53 

27 

5689  30 

45329  96 

28 

3411  34 

44366  31 

9 

6729  51 

110501  00 

28 

4329  40 

46689  86 

29 

2302  18 

45475  47 

10 

3414  53 

113815  98 

29 
30 

292S  71 
1486  18 

48090  55 
49533  08 

30 

1165  74 

46611  91 

$1000000  00 

$1000000  00 

3  Per  Cent.— 15  Years. 

Debentures  bearing  3  per  cent. 
Interest,  Payable  in  15 

$1000000  00 

3 

Percent.— 2 

0  Years. 

3  1-2  Per  Cent.- 

-20  Years. 

Deben 

tures  bearir 

g  3  per  cent, 
ible  in  20 

Debentures  bearin 

g  3i  per  cent. 

In 

ierest,  Pay. 
Nearly  Insta 

Yearly  Instalments. 

Interest,  Pay. 

ible  in  20 

1 

lments. 

Yearly  Instalments. 

EQU 

AL  ANNUAL 

$67,215 

PAYMENT, 

.71 

EQUAL  ANNUAL  PAYMENT, 

$83,766.58 

EQUAL  ANNUAL 

$70,361 

PAYMENT, 

.08 

Each 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

Kaeh 
Year. 

Interest. 

Principal. 

1 

$30000  00 

$37215  71 

1 

$30000  00 

$53766  58 

1 

$35000  00 

$35361  08 

2 

28883  53 

38332  18 

2 

28387  00 

55379  58 

2 

33762  36 

36598  72 

3 

27733  56 

39482  15 

3 

26725  61 

57040  97 

3 

32481  41 

37879  67 

4 

26549  10 

40666  61 

4 

25014  39 

58752  19 

4 

31155  62 

39205  46 

5 

25329  10 

41886  61 

5 

23251  82 

60514  76 

5 

29783  43 

40577  65 

e 

24072  50 

43143  21 

6 

21436  38 

62330  20 

6 

28363  21 

41997  87 

7 

22778  20 

44437  51 

7 

19566  47 

64200  11 

7 

26893  28 

43467  80 

8 

21445  08 

45770  63 

8 

17640  47 

66126  11 

8 

25371  91 

44989  17 

9 

20071  96 

47143  75 

9 

15656  68 

68109  90 

9 

23797  29 

46563  79 

10 

18657  64 

4S.-.5S  07 

10 

13613  39 

70153  19 

10 

22167  56 

48193  52 

11 

17200  90 

50014  81 

11 

11508  79 

72257  79 

11 

20480  78 

49880  30 

12 

15700  46 

51515  .25 

12 

9341  06 

74425  52 

12 

18734  97 

51626  11 

13 

14155  00 

53060  71 

13 

7108  29 

76658  29 

13 

16928  06 

53433  02 

14 

12563  18 

54652  53 

14 

4808  54 

78958  04 

14 

15057  90 

55303  18 

15 

10923  60 

56292  11 

15 

2439  81 

81326  77 

15 

13122  29 

572::s  79 

16 

9234  84 

57980  87 

16 

11118  94 

59242  14 

17 

7495  41 
5703  80 

59720  30 
61511  91 

$1000000  00 

17 
18 

9045  46 
6899  41 

61315  62 

18 

63461  67 

19 

3858  45 

63357  26 

19 

4678  26 

65682  82 

20 

1957  89 

1 

65257  82 

20 

2379  46 

67981  62 

l$1000000  00 

$1000000  00 

3  Per  Gent.— 25  Years. 

3  l--. 

Per  Cent.  .">  Years. 

S  1-2  Per  Cent- 

-30  Years 

Debent 

ires  bearin 

,'  3  per  cent. 

Debentures  bearing  3$  per  cent. 

Debentures  bearing 

3i  per  cent. 

Interest,  l'.iv. 

1  >li-  in  25 

[nterest,  Payable  in  5  . 

Interest,  Payable  in  30 

\ 

early  Insta 

incuts. 
PAYMENT. 

Yearly  Instalments. 
EQUAL  ANNUAL  PAYMENT, 

EQVJ 

early  Instalments. 

EQUAL  ANNUAL 

lL  annual 

PAYMENT. 

.$57.427. ss. 

$221,481.38 

$54  371,34. 

Each 
Year. 

Interest. 

Principal. 

Kuril 

Year. 

Interest. 

Principal. 

Each 
\'  ear. 

Interest. 

Principal. 

1 

$30000  00 

$27427  88 

1  • 

§35000  00 

$186481  38 

1 

$35000  00 

$19371  34 

2 

26177  16 

28250  72 

2 

28473  15 

193008  23 

2 

34322  00 

20049  34 

3 

28329  hi 

2! M Mis  24 

3 

21717  86 

199703  52 

3 

33620  28 

20751  06 

4 

27456  09 

29971  19 

4 

14726  14 

206755  24 

4 

32893  99 

21477  35 

5 

26557  55 

30870  33 

5 

7489  75 

213991  63 

5 

32142  28 

22229  06 

6 

25631  44 

21077  .".,") 

31796  44 
32750  33 

6 

31304  26 

23007  08 

$1000000  00 

7 

30559  02 

2972.')  59 
28862  98 

23812  32 
24645  75 
25508  36 

8 
9 

23095  04 

22683  06 

33732  84 
34744  82 

3  1-2  Per  Tent.— 10  Years. 

8 
9 

10 

■_'ltiin  71 

357S7  17 

Debentures  bearing  3£  per  cent. 

10 

27970  19 

2ii40l  15 

11 

20567  10 

36860  78 

Interest,  Payable  in  10 

11 

27046  I-". 

27325  19 

12 

19461  27 

37966  61 

Y 

early  Instalments. 

12  • 

26089  77 

28281  57 

13 
14 

18322  27 
17149  11 

39105  61 

40278  77 

EQUAL  ANNUAL  PAYMENT, 

13 
14 

25099  91 
24075  41 

29271  43 
30295  93 

15 

15940  74 
11696  13 

41487  14 
42731  75 

S);i^0,"Z41..5i. 

15 
16 

23015  05 
21917  58 

31356  29 

16 

Each 

Interest. 

Principal. 

32453  76 

17 

13414  18 

44013  70 

Year. 

17 

20781  70 

33589  64 

18 
19 

12093  77 
10733  74 

45334  11 
46694  14 

18 
19 

19606  06 
18389  28 

34765  28 
35982  06 

1 

$35000  00 

$85241  37 

20 

9332  92 

48094  96 

2 

32016  55 

88224  82 

20 

17129  91 

37241  43 

21 

7890  07 

49537  81 

3 

28928  68 

91312  69 

21 

15826  46 

38544  88 

22 

6403  93 

51023  95 

4 

25732  74 

94508  63 

22 

14477  39 

39893  95 

23 

4873  22 

52554  66 

5 

22424  94 

97816  43 

23 

13081  10 

41290  24 

24 

3296  5S 

54131  30 

6 

19001  36 

101240  01 

24 

11635  95 

42735  39 

25 

1673  13 

55754  75 

7 

15457  96 

104783  41 

25 

10140  20 

44231  14 

8 
9 

11790  54 
7994  76 

108450  83 
112246  61 

26 

27 

8592  11 
6989  84 

45779  23 

$1000000  00 

47381  50 

10 

4066  17 

116175  20 

28 

5331  48 

49039  86 

3  1- 

JPerCent,- 

-25  Years. 

29 
30 

3615  09 
1839  17 

50756  25 
52532  17 

Debent 

ures  bearin 

g  3i  per  cent. 

$1000000  00 

In 

terest,  Pa}- 
lt early  Insta 

ible  in  25 
lments. 

1 

31 

2  Per  Cent.— 15  Y  ears. 

$1000000  00 

Debent 
In 

ures  bearing  3A  per  cent, 
terest,  Payable  in  15 

EQD 

\L  ANNUAL 

PAYMENT, 

4  Per  Cent- 

JO  Years. 

$60,674 

.04 

t 

Nearly  Instalments. 

Debentures  bearir 

g  4  per  cent. 

Each 
Year. 

Interest.  Pav< 

ible  in  20 

Interest. 

Principal. 

EQU 

AL  ANNUAL  PAYMENT, 

$86,825.08 

Nearly  Instalments. 

1 

s:;.-,i ii mi  mi 

$25674  04 

EQUAL  ANNUAL 

$73,581. 

PAYMENT, 

2 

34101  41 
33171  37 
32208  77 

26572  63 
27502  67 
28465  27 

Each 
Year. 

Interest. 

Principal. 

/5. 

3 
4 

Each 
Year. 

Interest. 

Principal. 

5 
6 

31212  4!t 
31 11, SI  33 

29461  55 
30492  71 

1 

$351100  00 

33186  12 

$51825  08 
53638  96 

2 

1 

$40000  00 

$33581  75 

7 

29114  o«.i 

31559  95 

3 

31308  76 

55516  32 

2 

38656  73 

34925  02 

8 

28009  -lit 

32664  55 

4 

29365  68 

r.7459  40 

3 

37259  73 

36322  02 

9 

•JIM ill  23 

33807  81 

5 

27354  61 

59470  47 

4 

35806  85 

37774  90 

10 

25682  96 

31991  08 

6 

25273  14 

61551  94 

5 

3429.".  85 

39285  90 

11 

24458  26 

36215  78 

7 

231  IS  82 

03706  26 

6 

32724  41 

40857  34 

12 

23190  72 

37483  32 

8 

20S89  II 

6593r.  97 

7 

31090  11 

424!  11  04 

13 

21878  80 

38795  24 

9 

isr.sl  35 

68243  73 

8 

29390  45 

44191  30 

14 

20520  97 

40153  07 

10 

16192  82 

70632  26 

9 

27022  SI 

4595S  91 

15 

19115  61 

U558  43 

11 

13720  69 

73104  39 

10 

25784  15 

47797  30 

16 

I70.il  H7 

43012  97 

12 

11162  03 

75663  05 

11 

23S72  56 

49709  19 

17 

Mil.-,:,  (il 

44518  i:i 

13 

8513  S3 

78311  25 

12 

21  ssi  19 

51697  66 

18 

1  1597  17 

46076  57 

14 

r.772  93 

Slo.VJ  15 

13 

[9816  29 

537<>5  46 

19 

12984  7M 

17689  25 

15 

2930  31 

838SS  77 

14 

L7665  07 

.-..-.916  08 

20 
21 

ii3ir.  (it; 
9588  12 
7800  M 

19358  38 
51085  92 
52873  93 

1  - 

15429  03 

13102  92 

58152  72 
60478  S3 

S no  on 

16 

22 

17   10683  77 

62897  98 

23 

5949  •"'••; 

54724  51 

is    si 07  85 

05 113  91 

24 

1034  17 

66639  87 

19 

.-..-..-.1  29 

68030  47 

25 

2(ir.  1  97 

58622  07 
$1000000  00 

20 

2830  07 

70751  69 

$1000000  00 

4  Per  Cent.— 5  Years 

Debentures  bearing  4  per  cent. 

Interest,  Payable  in  5 

Yearly  Instalments. 


EQUAL   ANNUAL   PAYMENT, 

$224,627.11. 


4  Per  tent.  35  Years. 

Debentures  bearing  4  per  cent. 

Interest,  Payable  in  25 

Yearly  Instalments. 


EQUAL    ANNUAL    PAYMENT, 

$64,011.96. 


4  Per  tent.— 30  Years. 

Debentures  bearing  4  per  cent. 

Interest,  Payable  in  30 

Yearly  Instalments. 

EQUAL   ANNUAL   PAYMENT, 

$57,830.10. 


yaC       Interest.        Principal. 


$40000  00 

32614  92 

24934  42 

16946  71 

8639  50 


Year      Interest.       Principal. 


$184627  11 
192012  19 
199692  69 
207680  40 
215987  61 


$1000000  00 


4  Per  Ce»t.— 10  Years. 

Debentures  bearing  4  per  cent, 

Interest,  Payable  in  10 

Yearly  Instalments. 

EQUAL  ANNUAL   PAYMENT, 

$123,290.95. 


Each 
Year. 


Interest. 


$40000  00 
36668  37 
33203  46 
29599  96 
25852  33 
21954  78 
17901  33 
13685  75 
9301  54 
4741  96 


Principal. 


$83290  95 
86622  58 
90087  49 
93690  99 
97438  62 
101336  17 
105389  62 
109605  20 
113989  40 
118548  98 


SUM 

39039  52 
38040  62 
37001  77 
35921  36 
34797  74 
33629  17 
32413  86 
31149  94 
29835  46 
28468  40 
27046  66 
25568  05 
24030  29 
22431  01 
20767  77 
19038  01 
17239  05 
15368  13 
13422  38 
11398  79 
9294  27 
7105  56 
4829  30 
2462  00 


$24011  96 
24972  44 
25971  34 
27010  19 
28090  60 
29214  22 
30382  79 
31598  10 
32862  02 
34176  50 
35543  56 
36965  30 
38443  91 
39981  67 
41580  96 
43244  20 
44973  96 
46772  92 
48643  84 
50589  59 
52613  18 
54717  70 
56906  41 
59182  67 
61549  97 


$1000000  00 


$1000000  00 


4  Per  Cent.— 15  Years 

Debentures  bearing  4  per  cent. 

Interest,  Paj'able  in  15 

Yearly  Instalments. 


4  1-3  Per  Cent.— 35  Years. 

Debentures  bearing  4^  per  cent, 

Interest,   Payable  in  25 

Yearly  Instalments. 


EQUAL  ANNUAL  PAYMENT, 

$67,439.03. 


EQUAL  ANNUAL  PAYMENT. 

$89,941.10 


Each 
Year. 


Each 
Year. 


Interest. 


$40000  00 

38002  36 

35924  81 

33764  16 

31517  08 

29180  12 

26749  68 

24222  02 

21593  26 

18859  34 

16016  07 

13059  07 

9983  79 

6785  50 

3459  28 


Principal. 


$49941  10 
51938  74 
54016  30 
56176  94 
58424  03 
60760  98 
63191  43 
65719  08 
68347  85 
71081  76 
73925  03 
76882  03 
79957  31 
83155  60 
86481  82 


$1000000  00 


Interest. 


$45000  00 
43990  25 
42935  05 
41832  37 
40680  07 
39475  92 
38217  58 
36902  61 
35528  47 
34092  50 
32591  91 
31023  78 
29385  10 
27072  67 
25883  19 
24013  17 
22059  01 
20016  91 
17882  91 
15652  89 
13322  51 
10887  27 
8342  44 
5683  09 
2904  08 


Principal. 


$22439  03 
23448  78 
24503  98 
25606  66 
26758  96 
27963  11 
29221  45 
30536  42 
31910  56 
33346  53 
34847  12 
36415  25 
38053  93 
39766  36 
41555  84 
43425  86 
453SO  (12 
47422  12 
49556  12 
51786  14 
54116  52 
56551  76 
59096  59 
61755  94 
64534  95 


Year1  Interest-   Principal. 


sin to 

39286  80 
38545  07 
37773  66 
36971  41 
36137  06 
35269  34 
34366  90 
33428  38 
32452  31 
31437  20 
30381  48 
29283  54 
28141  67 
26954  14 
25719  10 
24434  66 
23098  84 
21709  59 
20264  77 
18762  16 
17199  44 
15574  21 
13883  98 
12126  13 
10297  97 
8396  69 
6419  35 
4362  92 
2224  23 


$1783010 
1854330 
1928503 
2005644 
20S5S69 
2169304 
22560  76 
23463  20 
24401  72 
25377  79 
26392  90 
27448  62 
28546  56 
29688  43 
30875  96 
32111  00 
33395  44 
34731  26 
36120  51 
37565  33 
39067  94 
40630  66 
42255  89 
43946  12 
45703  97 
47532  13 
49433  41 
51410  75 
53467  18 
55605  87 

$1000000  00 


4  1-3  Per  Cent.— 30  Years. 

Debentures  bearing  4^  per  cent. 

Interest,  Payable  in  20 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT. 

$76,876.15. 


Each 
Year. 


$1000000  00 


Interest. 


$45000  00 
43565  58 

42066  60 
40500  17 
38863  26 
37152  68 
35365  12 
33497  12 
31545  07 
29505  17 
27373  47 
25145  85 
22817  99 
20385  37 
17843  29 
15186  81 
12410  79 
9509  84 
6478  36 
3310  46 


Principal. 


$31876  15 
33310  57 
34809  55 
3637."»  98 
38012  89 
39723  47 
41511  03 
43379  03 
45331  08 
47370  98 
49502  68 
51730  30 
54058  16 
56490  78 
59032  86 
61689  34 
64465  36 
67366  31 
70397  79 
73565  69 

$1000000  00 


4  1-2  Per  Cent.— 5  Tears. 

Debentures  bearing  4.\  per  cent. 

Interest,   Payable  in  S 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$227,791.64 


4  1-2  Tor  Cent.— 30  Years. 
Debentures  bearing  4\  per  cent. 

Iiit'-n-sl ,  l'ayalilr  in  30 

Yearly  Instalments. 

EQUAL  ANNUAL    PAYMENT, 

$61,391.55. 


5  Per  tent.— 5  Years. 

Debentures  bearing  5  per  cent. 

Interest,  payable  in  5 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT. 

S'230,974.80. 


Each 
Year. 


Interest. 


845000  (Ml 

36774  38 

28178  60 
19196  01 

SlSii'l  21 


Principal. 


$182791  64 
191017  26 
199613  04 
208595  63 
217982  43 


51000000  00 


4  1-2  I'er  Cent.— 10  Years. 

Debentures  bearing  4i  per  cent 

Interest,  Payable  in  10 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$126,378.83. 


Each 
Year. 


Interest. 


$45000  00 
41337  95 
37511  11 
33512  07 
29333  06 
24966  00 
20402  43 
15633  49 
10649  95 
5442  15 


Principal. 


§81378  83 
85040  87 
88867  71 
92866  75 
97045  76 
101412  82 
105976  39 
110745  33 
115728  87 
120936  67 


SlOOOl 10 


4 1-2  Per  Cent  —15  Years. 

Debentures  bearing  4i  per  cent 

Interest,  Payable  in  15 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

893,113.81. 


Each 
Year. 


Interest. 


$45000  00 
42834  88 
4(1572  33 
38207  96 
35737  20 
33155  25 
30457  L2 
27637  56 
24691  13 
21612  11 
18394  54 
15032  17 
l  l ;,  I  s  61 1 
7846  71 
4009  69 


Principal. 


$48113  81 
50278  93 
52541  48 
54905  85 
57376  61 
59958  56 
62656  69 
65476  25 
68422  68 
7150]  70 
7  17 III  27 
78081  64 
81595  31 
85267  I" 
89104  L2 

$1000000  00 


Y^1     Interest.        Principal. 


$45( Mil 

1 1262  39 
43491  57 
42686  "7 
41844  33 
40964  71 
40045  50 
39084  93 
38081  13 
37032  16 
35935  99 
34790  49 
33593  44 
32342  52 
31035  32 
29669  29 
28241  78 
26750  04 
25191  18 
23562  16 
21859  83 
20080  91 
18221  93 
16279  30 
14249  24 
12127  84 
9910  97 
7594  35 
5173  47 
2643  66 


|^J   Interest. 


$16391  55 
17129  16 
17899  98 
18705  48 
19517  22 
20426  84 
21346  05 
22306  62 
23310  42 
24359  39 
25455  5(5 
26601  06 
27798  11 
29049  03 
30356  23 
31722  26 
33149  77 
34641  51 
36200  37 
37829  39 
39531  72 
41310  64 
43169  62 
45112  25 
47142  31 
49263  71 
51480  58 
53797  20 
56218  08 
58747  89 


85UI) i 

40951  26 
31  150  09 
21473  85 
10998  80 


Principal. 


SI 80974  80 
190023  54 
199524  71 

2i  1951  Ml  95 
219976  00 


! 1000000  00 


5  Per  Cent.— 10  Years. 

Debentures  bearing  5  per  cent. 

Interest,  Payable  in  10 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$129,504.58. 


sioooooo  no 


5  Per  Cent.— 20  Years. 

Debentures  bearing  5  per  cent. 

Interest,  Payable  in  20 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

ssi  »,242. 59. 


Each 
Year. 


Interest. 


$50000  00 
48487  87 
^6900  14 
45233  02 
43482  54 
41644  53 
39714  63 
37688  23 
35560  52 
33326  41 
30!  ISO  60 
28517  50 
25931  25 
2321.".  68 
20301  31 
1737U  42 
I  1221  i  M 
10!  120  03 

7460  20 
382]  (is 


Principal. 


$30242  59 
31754  72 
33342  45 
35009  57 
36760  05 
38598  06 
40527  96 
42554  36 
44682  07 
46916  is 
49261  99 
51725  0!) 
54311  34 
.-.7(120  ill 
59878  25 
62872  17 
66015  78 
69316  56 
727S2  39 
70121  51 


SlOOOOOO  00 


Each 
Year. 

Interest. 

Principal. 

1 

$50000  00 

$79504  58 

2 

46024  77 

83479  81 

3 

41850  78 

87653  80 

4 

37468  09 

92036  49 

5 

32866  27 

96638  31 

6 

28034  35 

101470  22 

7 

22960  84 

106543  73 

8 

17633  65 

111870  92 

9 

12040  11 

117464  46 

10 

6166  89 

123337  68 
$1000000  00 

5  Per  Cent.— 15  Years. 

Debentures  bearing  5  per  cent. 

Interest,  Payable  in  15 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$96,342.29. 


Each 
Year. 


Interest. 


sr.oooo  oo 
47682  89 
45249  92 
42695  30 
40012  95 
371!  16  48 
3123!)  19 
31134  04 
27S73  63 
24450  19 
20855  59 
1 70s  I  25 
131  is  20 
8956  99 
4587  73 


Principal. 


$46342  29 

48659  40 
51092  37 
53646  99 

5032!)  34 

59]  »:>  si 

02103  10 
65208  25 
68468  66 

71892  10 
75486  70 
79201  04 
S3224  09 
87385  30 
91754  56 


$1000000  oo 


5 

Deben 
In 

Per  Cent.— 25  Years. 

Aires  bearing  5  per  cent, 
terest,  Payable  in  25 
Nearly  Instalments. 

JAL  ANNUAL  PAYMENT, 

$70,952.46. 

5  Per  Cent.— 30  Years. 

Debentures  bearing  5  per  cent. 

Interest,  Payable  in  .*}(l 

Yearly  Instalments. 

EQUAL  ANNUAL  PAYMENT, 

$65,051.44. 

5  1- 

Deben 
In 

EQl 

1   Per  Cent.— 5  Yearn, 
urea  bearing  5i  per  cent, 
terest,  Payable  in  5 
[early  Instalments. 

EQl 

AL  ANNUAL  PAYMENT, 

$234,176.44. 

Each 
Year . 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

Each 
Year 

Interest. 

Principal. 

1 
2 
3 
4 
5 
6 
7 

$50000  00 
48952  38 
47852  38 
46697  37 
45484  62 
44211  23 
42874  16 
41470  25 
39996  14 
38448  32 
36823  11 
35116  65 
33324  86 
31443  '48 
29468  03 
27393  81 
25215  87 
22929  04 
20527  87 
18006  64 
15359  35 
12579  70 
9661  06 
6596  49 
3378  69 

$20952  46 
22000  08 
23100  08 
24255  09 
25167  84 
26741  23 
28078  30 
29482  21 
30956  32 
32504  14 
34129  35 
35835  81 
37627  60 
39508  98 
41484  43 
43558  65 
45736  59 
48023  42 
50424  59 
52945  82 
55593  11 
58372  76 
61291  40 
64355  97 
67573  77 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

29 

30 

$.".0000  00 
49217  43 
48457  23 
47627  52 
46756  33 
45841  57 
44881  08 
43872  56 
42813  61 
41701  72 
40534  24 
39308  38 
38021  22 
36669  72 
35250  63 
33760  59 
32196  05 
30553  28 
28828  37 
27017  21 
25115  50 
23118  71 
21022  07 
18820  60 
16509  06 
14081  94 
11533  46 
8857  56 
6047  87 
3097  69 

$15051  44 
15804  01 
16594  21 
17423  92 
18295  11 
19209  87 
20170  36 
21178  88 
22237  83 
23349  72 
24517  20 
25743  06 
27030  22 
28381  72 
29800  81 
31290  85 
32855  39 
34498  16 
36223  07 
38034  23 
39935  94 
41932  73 
44029  37 
46230  84 
48542  38 
50969  50 
53517  98 
56193  88 
59003  57 
61953  75 

$1000000  00 

1 
2 
3 
4 
5 

$55000  00 
45145  30 
34748  59 
23780  <•<) 
L2208  25 

$179176  44 
189031  14 
199427  85 
210396  38 
221968  19 

$1000000  00 

8 
9 
10 
11 
12 

5  1- 

Debent 
In 

EQU 

£  Per  Cent.— 10  Years. 

ures  bearing  5.^  per  cent. 
/erest,  Payable  in  10 
Nearly  Instalments. 

13 

14 
15 

AL  ANNUAL  PAYMENT, 

$132,667.77. 

16 
17 

Each 
Year. 

Interest. 

Principal. 

18 
19 
20 
21 
22 
23 
24 
25 

1 

2 
3 
4 
5 
6 
7 
8 
9 
10 

$55000  00 
50728  28 
46221  60 
41467  06 
36451  02 
31159  10 
25576  13 
19686  09 
13472  09 
6916  33 

$77667  77 
81939  49 
86446  17 
91200  71 
96216  75 
101508  67 
107091  64 
112981  68 

$1000000  00 

119195  68 
125751  44 

5  1- 

i  Per  Cent. 

ures  bearin 
terest,  Paya 
iTearly  Insta 

—25  Years. 

1  5^  per  cent, 
ble  in  25 
lments. 

PAYMENT, 

36. 

Debent 

$1000000  00 

1 

51- 

Debem 
In 

EQU 

i  Per  Cent.— 15  Years. 

ures  bearing  5|  per  cent. 

4.L  ANNUAL 
$74,549. 

EQU 

5  1-2 

Debent 
In 

EQU 

Per  Cent  - 

ures  bearin, 
.erest,  Paya 
"early  Insta 

iL  ANNUAL 

$83,679. 

20  Years 

r  :H  per  cent. 
Lie  in  20 
lments. 

PAYMENT, 

33. 

terest,  Payable  in  15 
Nearly  Instalments. 

Each 
Year. 

Interest. 

Principal. 

AL  ANNUAL  PAYMENT, 

$99,625.60. 

$55000  00 
53924  79 
52790  44 
51593  70 
50331  14 
48999  14 
47593  87 
46111  32 
44547  23 
42897  11 
41156  24 
39319  62 
37381  98 
35337  78 
33181  14 
30905  89 
28505  50 
25973  08 
23301  39 
20482  75 
17509  09 
14371  87 
11062  11 
7570  31 
3886  46 

$19549  36 
20624  57 
21758  92 
22955  66 
24218  22 
25550  22 
26955  49 
28438  04 
30002  13 
31652  25 
33393  12 
35229  74 
37167  38 
39211  58 
41368  22 
43643  47 
46043  86 
48576  28 
51247  97 
54066  61 
57040  26 
60177  48 
63487  24 
66979  04 
70662  89 

1 

2 

Each 
Year. 

Interest. 

Principal. 

3 

Each 
Year. 

Interest. 

Principal. 

4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 

1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 

$55000  00 
52545  60 
49956  19 
47224  38 
44342  31 
41301  73 
38093  92 
34709  67 
31139  30 
27:<72  ->.l 
23398  63 
1921  Hi  15 
147S3  08 
10116  74 
5193  75 

$44625  60 
47080  00 
49669  41 
52401  22 
55283  29 
58323  87 
61531  68 
64915  93 
68486  30 
72253  05 
76226  97 
80419  45 
84842  52 
89508  86 
94431  85 

1 
2 
3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

$55000  00 
53422  64 
51758  52 
50002  87 
48150  67 
46196  59 
44135  (14 
41960  11 
39665  "'•"> 
.S7244  79 
34690  89 
31996  53 
29153  97 
26155  08 
22991  25 
19053  40 
16131  97 
12416  87 
S197  43 
4362  43 

$28679  33 
3H256  69 
31920  81 
33676  46 
35528  66 
37482  74 
39544  20 
41719  22 
44013  78 
46434  54 
48988  1 1 
51682  80 
54525  36 
57521  25 
60688  08 
64025  93 
67547  36 
71262  46 
751  SI  90 
79316  90 

20 
21 
22 
23 
24 
25 

$1000000  00 

$1000000  00 

$1000000  00 

5  1-', 

Percent.— 30  fears 

6  1 

Vr  Cent.— 6  Years. 

G  1 

er  Cent—  25  Years. 

Debentures  bearing  5£  per  cent.  Debentures  bearing  G  per  cent 

Debentures  bearing  6  per  cent. 

Interest,  Payable  in  30 

Interest,  payable  in  5 

Interest,  Paya 

tie  in  25 

Y 

early  lust  a! 

ments. 

WYMKNT. 

Y 

EQU 

early  Instalments. 

Yearly  [natal 

EQUAL   ANNUAL   ] 

ments. 

EQIJ  \i-  ANNUAL 

\L  ANNUAL  PAYMENT. 

•AYMENT, 

168,805.39 

§237,396.40. 

§78,226. 

72. 

Bach 

\  ear. 

Interest. 

Principal 

Each 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

j 

-.V 

§1 3805  39 

1 

£60000  00 

§177396  40 

1      §60000  00 

§18226  72 

2 

54240  70 

L4564  69 

2 

49356  22 

1  ssi  140  18 

2 

58906  40 

19320  32 

3 

53439  65 

L5365  74 

3 

38073  80 

199322  60 

3 

57747  18 

20479  54 

4 

52594  .V! 

16210  86 

4 

20114  45 

211281  95 

4 

505 IS  41 

21708  31 

5 

51702  93 

17102  Hi 

5 

L3437  53 

223958  87 

5 

55215  91 

23010  81 

6 

50762  30 

18043  09 

6 

53835  26 

24391  46 

7 

49769  93 

19035  41  i 

SIIMMKIIII)   (Ml 

7 

52371  77 
50820  48 

25854  95 
27406  24 

8 

48722  98 

20082  41 

8 

9 

47(518  44 

21186  95 

G  Per  Cent.— 10  Years. 

9 

49176  10 

29050  62 

10 

46453  Hi 

22M52  23    Debentures  bearing  6  per  cent. 

10 

47433  06 

30793  66 

11 

45223  79 

23581  60 

Interest,  Payable  in  10 

11 

45585  44 

32641  28 

12 

43926  80 

24878  59 

Yr early  Instalments. 

12 

43626  97 

34599  75 

42558  48 

26246  91 

13 

41550  98 

36675  74 

13 

14 

41114  90 

27690  49 

EQUAL   ANNUAL   PAYMENT. 

14 

39350  44 

38876  28 

15 

39591  92 

29213  47 

§135,867.96. 

15 

37017  86 

41208  86 

16 
17 

37985  18 
36290  07 

30820  -21 
32515  32 

16 
17 

34545  33 

Ml 924  45 

43681  39 
46302  27 

Each 

Interest. 

Principal. 

18 

34501  73 

34303  66 

Year. 

18 
19 
20 

29146  31 
26201  48 
23079  97 

49080  41 
52025  24 
55146  75 

19 
20 

32615  03 

30624    56 

36190  36 
38180  83 

1 

§60000  00 

§75867  96 

21 
22 

28524  61 
26309  17 

40280  78 
42490  22 

2 
3 

55447  93 
50622  72 

80420  03 
85245  24 

21 
22 

19771  16 
16203  83 

58455  56 
61962  89 

23 
24 

23971  88 

21506  03 

44833  51 
47299  36 

4 
5 

45508  01 
40086  41 

90359  95 
95781  55 

23 
24 

12546  06 
8605  22 

65680  66 
69621  50 

25 

18904  57 

49900  82 

6 

34339  52 

101528  44 

25 

4427  93 

73798  79 

16160  02 

52645  37 

7 

28247  81 

107620  15 

26 

27 

L3264  53 

55540  86 

8 

21790  60 

114077  36 
120922  00 
128177  32 

§1000000  00 

28 
29 

10209  78 
6987  02 
3587  01 

58595  61 
61818  37 
65218  38 

9 
10 

14945  96 
7690  64 

6  Per  Cent.— 30  Years. 

Debentures  bearing  6  per  cent. 
Interest,  Payable  in  30 

30. 

561000000  00 

381000000  00 

■5 

EQU 

Nearly  Instalments. 

6 

Deben 

Per  Cent.— 15  Years. 

;ures  bearing  6  per  cent. 

AL    ANNUAL 

c 

Percent.— 20  Years. 

PAYMENT, 

Deben 

area  bearing  6  per  cent, 
terest,  Payable  in  20 
Nearly  Instalments. 

In 

EQU 

terest,  Payable  in  15 

§72,648.91. 

In 

Nearly  Insta 

Iments. 

Each 
Year. 

Interest. 

Principal. 

EQU 

AL  ANNUAL  PAYMENT, 

AL   ANNUAL   PAYMENT, 

1 

160000  00 

$12648  91 

887,184.56. 

§102,962.77. 

2 
3 

59211  07 
58436  60 

13407  84 
14212  31 

Eaeli 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

4 
5 
6 
7 
8 

57583  86 
5lifi7!»  % 
55721  82 
64706  20 
58629  63 

15065  05 
15968  95 
16927  09 

1 

§60000  00 

§27184  56 

1 

§60000  00 

§42962  77 

L7942  Tl 
L9019  29 

2 

58368  93 

28815  63 

2 

57422  24 

45540  53 

9 

524SS   IS 

20160  44 

3 

56639  99 

30544  57 

3 

54689  81 

48272  96 

10 
11 
12 

51278  85 
49996  65 
48637  51 

21370  07 
82658  27 
24011  41 

4 

54807  32 

32377  24 

4 

51793  43 

51109  34 

5 

52864  68 

34319  88 

5 

48723  27 

54239  50 

13 

IT  196  S2 

25459  10 

6 

50805  49 

30379  07 

6 

45468  90 

57493  87 

14 

15669  70 

86979  22 

7 

B622  75 

38561   M 

7 

42019  27 

60943  50 

15 
16 

44050  94 
12335  07 

28597  98 
30313  85 

8 

16309  04 

40875  52 

8 

38362  66 

040110    1  1 

17 

40516  23 

32132  69 

9 

13856  .".I 

43328  05 

9 

34486  65 

68476  12 

18 

88588  :.'T 

84060  65 

10 

41256  82 

45927  74 

10 

30378  08 

72584  69 

19 
20 
21 

86544  'it 
34378  38 
32082  15 

36104  28 
B8270  54 
10566  77 

11 

38501    L6 

18683   10 

11 

26023  00 

76939  77 

12 

35580  15 

51604    II 

12 

21406  62 

81556  15 

22 

29648  11 

43IMH)  78 

13 

32483  89 

54700  07 

13 

10513  25 

86449  52 

23 

87068  09 

46580  83 

14 

29201  85 

57982  71 

14 

LI 326  28 

91636  49 

24 
25 

84833  24 
21434  30 

48315  68 
51214  62 

15 

25722  s«t 

61461  07 

13 

5828  ii!  i 

97134  68 

86 

18861    19 

54887  50 

Hi 

22035  19 

651  19  37 



27 

ir.iiu  it 

;,T.r»44  75 

17 

L8126  22 
L3982  72 

69058  34 
73201  84 

§1000000  00 

28 

2!) 
30 

11651    19 
799]  M 
4112  81 

60997  43 
64657  28 

18 

68686  Tl 

19 

9590  62 

77593  94 



20 

4934  98 

82249  58 

TllNHH Ill 

$1000000  00 

PROOF    OF    ANNUITY    PAYMENTS. 


To  ascertain  the  amount  of  annual  instalment  or  levy  for  repayment  of  a 
loan  of  any  amount  with  yearly  interest  as  given  hereunder. 


Years. 

2  per  Cent. 

2£  per  Cent. 

3  per  Cent. 

5 

Divide  amount  of  Loan  by 

4.7134 

4.6458 

4.5799 

10 

8.9826 

8.7526 

8.5302 

15 

12.8492 

12.3814 

11.9379 

20 

16.3514 

15.5892 

14.8775 

25 

19.5235 

18.4244 

17.4131 

30 

22.3965 

20.9303 

19.6004 

Years. 

3^  per  Cent. 

4  per  Cent. 

4i  per  Cent. 

5 

Divide  amount  of  Loan  by 

4.5150 

4.4518 

4.3899 

10 

8.3166 

8.1108 

7.9127 

15 

11.5174 

11.1184 

10.7396 

20 

14.2124 

13.5903 

13.0080 

25 

16.4815 

15.6221 

14.8282 

30 

18.3920 

17.2920 

16.2889 

Years. 

5  per  Cent. 

5^  per  Cent. 

6  per  Cent. 

5 

Divide  amount  of  Loan  by 

4.3251 

4.^703 

4.2123 

10 

" 

7.7217 

7.5376 

7.3601 

15 

« 

10.3796 

10.0376 

9.7122 

20 

" 

12.4622 

11.9504 

11.4699 

25 

« 

14.0939 

13.4139 

12.7833 

30 

"                      " 

15.3724 

14.5338 

13.7648 

Purchasers  of  debentures  and  bonds  always  require  to  satisfy  themselves 
that  the  annual  payment  upon  the  debentures  which  they  are  buying  has 
been  correctly  calculated.  The  above  table  furnishes  a  quick  and  certain 
check  as  to  this.  Example:  Debentures  for  $10,000  at  4  per  cent,  20  years, 
requires  an  equal  annual  payment  of  $735.82.  To  prove  this  by  the  table 
given:     $10,000^-13. 59Q3=$735-8ifV 


TABLE 

3HOWINO   THE    ANNUAL   INTEREST   TO    BE    REALIZED   FROM 

Stocks,  Bonds  and  Debentures 

Bearing  the  interest  given  along  the  top,  when  purchased  at  the  rate  in  the  first  or  "price" 
column.  Example:  Stock  paying  annually  5  per  cent  if  purchased  at  a  102  will  net  4.90  per 
cent  on  the  investment. 


Price. 

3 

per  Cent. 

Si 

per  Cent. 

4 

per  Cent. 

per  Cent. 

5 
per  Cent. 

6 
per  Cent. 

7 
per  Cent. 

50 

6.00 

7.00 

8.00 

9.00 

10.00 

12.00 

14.00 

55 

5.45 

6.36 

7.27 

8.20 

9.09 

10.90 

12.72 

60 

5.00 

5.83 

6.66 

7.50 

8.33 

10.00 

11.66 

65 

4.61 

5.38 

6.15 

7.00 

7.69 

9.23 

10.76 

70 

4.28 

5.00 

5.71 

6.43 

7.14 

8.57 

10.00 

75 

4.00 

4.67 

5.33 

6.00 

6.66 

8.00 

9.33 

80 

3.75 

4.37 

5.00 

5.62 

6.25 

7.50 

8.75 

85 

3.52 

4.12 

4.70 

5.29 

5.88 

7.05 

8.23 

90 

3.33 

3.88 

4.44 

5.00 

5.55 

6.66 

7.77 

95 

3.15 

3  68 

4.21 

4.73 

5.26 

6.31 

7.36 

96 

3.13 

3.64 

4.16 

4.69 

5.21 

6.25 

7.29 

97 

3.09 

3.61 

4.12 

4.64 

5.15 

6.19 

7.21 

98 

3.06 

3.57 

4.08 

4.59 

5.10 

6.12 

7.14 

99 

3.03 

3.54 

4.04 

4.54 

5.05 

6.06 

7.07 

100 

3.00 

3.50 

4.00 

4.50 

5.00 

6.00 

7.00 

101 

2.97 

3.46 

3.96 

4.45 

4.95 

5.94 

6.93 

102 

2.94 

3.43 

3.92 

4.41 

4.90 

5.88 

6.86 

103 

2.91 

3.40 

3.88 

4.36 

4.85 

5.82 

6.79 

104 

2.89 

3.36 

3.84 

4.32 

4.80 

5.77 

6.73 

105 

2.86 

3.33 

3.81 

4.28 

4.76 

5.71 

6.66 

110 

2.73 

3.20 

3.63 

4.10 

4.54 

5.45 

6.36 

115 

2.60 

3.00 

3.47 

3.91 

4.35 

5.21 

6.08 

120 

2.50 

2.92 

3.33 

3.75 

4.16 

5.00 

5.83 

125 



2.80 

3.20 

3.60 

4.00 

4.80 

5.60 

130 



2.70 

3.08 

3.4(5 

3.84 

4.61 

5.38 

135 



2.65 

2.95 

3.33 

3.70 

4.44 

5.18 

140 





2.85 

3.21 

3.57 

4.28 

5.00 

145 





2  76 

3.10 

3.45 

4.13 

l .  82 

150 





2.66 

3.00 

3.33 

4.00 

4.66 

Rule  to  find  the  value  at  any  rate  not  included  in  this  table:  Multiply  the  rate  per  cent 
the  stock  is  bearing  by  100  and  divide  by  the  price  you  wish  to  pay.  The  result  will  give  the 
interest  the  investment  will  realize;  or,  divide  by  the  rate  of  interest  you  wish  the  investment  to 
realize,  and  the  result  will  give  the  price  to  be  paid  for  the  stock. 

Illustration:  Stock  bearing  4  per  cent  is  wanted  to  realize  5  per  cent:  4x  100  =  400-^5  =  80, 
the  price  .it  which  you  must  buy  to  realize  5  per  cent;  or  etock  bearing  6  per  cent  is  porchaaed 
ut  in;,,  what  will  it  realize:     Ox  100  =  000-^105  =  5.70  per  cent. 


COMPOUND   INTEREST  TABLE. 


Compound  Interest  Table,  One  Dollar  Principal. — The  sum  to  which  one  dollar  principal 
will  increase,  at  compound  interest,  in  any  number  of  years,  not  exceeding  forty,  at  2,  2i,  3, 
3^,  4,  4^,  5,  5^  and  6  per  cent  per  annum. 


09 

2 

2i 

3 

3£ 

4 

ih 

5 

54 

6 

c3 
(0 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent 

1 

1.020 

1.025 

1.030 

1.035 

1.040 

1.045 

1.050 

1.055 

1.060 

o 

1.040 

1.051 

1.061 

1.071 

1.082 

1.092 

1 .  103 

1.113 

1.124 

3 

1.061 

1.077 

1.093 

1.109 

1.125 

1.141 

1.158 

1   174 

1.191 

4 

1.082 

1.104 

1 .  126 

1.147 

1.170 

1.193 

1.216 

1.239 

1.262 

5 

1.104 

1.131 

1.159 

1.188 

1.217 

1.246 

1.276 

1.307 

1.338 

6 

1.126 

1.160 

1.194 

1.229 

1.266 

1.302 

1.340 

1.379 

1.419 

7 

1.148 

1.189 

1.230 

1.272 

1.316 

1.361 

1.407 

1.455 

1.504 

8 

1.171 

1.218 

1.267 

1.317 

1.369 

1.422 

1.477 

1.535 

1.594 

9 

1.195 

1.249 

1.305 

1.363 

1.423 

1.486 

1.551 

1.619 

1.689 

10 

1.219 

1.280 

1.344 

1.411 

1.480 

1.553 

1.629 

1.708 

1.791 

11 

1.243 

1.312 

1.384 

1.460 

1.539 

1.623 

1.710 

1.802 

1.898 

12 

1.268 

1.345 

1.426 

1.511 

1.601 

1.696 

1.796 

1.901 

2.012 

13 

1.293 

1.378 

1.469 

1.564 

1.665 

1.772 

1.886 

2.U06 

2.133 

14 

1.319 

1.413 

1.513 

1.619 

1.732 

1.852 

1.980 

2  116 

2.261 

15 

1.345 

1.448 

1.558 

1.675 

1  802 

1.935 

2.079 

2 .  232 

2.397 

16 

1.372 

1.484 

1.605 

1.734 

1.874 

2.022 

2.183 

2.355 

2.540 

17 

1.400 

1.521 

1.653 

1.795 

1.949 

2.113 

2.292 

2.485 

2.693 

18 

1 .  428 

1.560 

1.703 

1.858 

2.027 

2.208 

2.407 

2.621 

2.854 

19 

1.456 

1.599 

1.754 

1.923 

2.118 

2.308 

2.527 

2.766 

3.026 

20 

1.485 

1.638 

1.806 

1.990 

2.192 

2.412 

2.653 

2  918 

3.207 

21 

1.515 

1.679 

1.860 

2.060 

2.280 

2.520 

2.786 

3.078 

3.400 

22 

1.546 

1.721 

1.916 

2.132 

2.371 

2.634 

2.925 

3.248 

3.604 

23 

1.576 

1.764 

1.974 

2.206 

2.466 

2.752 

3.072 

3.426 

3.820 

24 

1.608 

1.809 

2.033 

2 .  284 

2.565 

2.S76 

3.225 

3.615 

4.049 

25 

1.640 

1.853 

2.094 

2.363 

2.667 

3.005 

3.386 

3.813 

4.292 

26 

1.673 

1.900 

2.157 

2 .  446 

2.774 

3.141 

3.556 

4.023 

4.549 

27 

1 .  706 

1.948 

2  221 

2.532 

2.885 

3.282 

3.733 

4.244 

4.822 

28 

1.741 

1.996 

2 .  288 

2.620 

3.000 

3.430 

3.920 

4.478 

5.112 

29 

1.775 

2.046 

2.357 

2.712 

3.120 

3.584 

4.116 

4 .  724 

5.418 

30 

1.811 

2.097 

2.428 

2.807 

3.245 

3.745 

4.322 

4.984 

5.743 

31 

1.847 

2.150 

2.500 

2.905 

3.375 

3.914 

4.538 

5.258 

6.088 

32 

1.884 

2.204 

2.575 

3.000 

3.510 

4.090 

4.765 

5.547 

6.453 

33 

1.922 

2.259 

2.652 

3.111 

3.650 

4.274 

5.003 

5.852 

6.841 

34 

1.960 

2.315 

2.732 

3.221 

3.796 

4.466 

5.253 

6.174 

7.251 

35 

1.999 

2.373 

2.814 

3.333 

3.948 

4.667 

5.516 

6.514 

7.686 

36 

2.039 

2.433 

2.898 

3.450 

4.106 

4.877 

5.792 

6.872 

8.147 

37 

2.080 

2.493 

2.985 

3.571 

4.270 

5.097 

6.081 

7.250 

8.636 

38 

2  1 22 

2.556 

3.075 

3  696 

4.441 

5.326 

6.385 

7.649 

9.154 

39 

2. 164 

2.620 

3.167 

3.825 

4.619 

5.56G 

6.705 

8.069 

9.704 

40 

2.207 

2.685 

3.262 

3.960 

4.803 

5.816 

7.040 

8.513 

10.286 

To  find  the  sum  to  which  a  given  amount  will  increase  at  compound  interest,  at  any  of  the 
rates  per  cent  and  number  of  years  expressed  in  the  above  table: 

Multiply  the  given  amount  by  the  sum  to  which  one  dollar  will  increase  at  the  rate  and  for  the 
number  of  years  required,  marking  off  as  many  decimals  from  the  product  as  there  are  decimals 
in  the  multiplier  and  multiplicand. 


SINKING    FUND    INVESTMENT    TABLE. 


Compound  Interest  Table— $1.00  per  annum,  deposited  at  end  of  year.  This  table  gives  the 
sum  to  which  one  dollar  per  annum,  paid  at  the  end  of  each  year,  will  increase  at  compound 
interest,  in  any  number  of  years  up  to  forty,  at  2,  2£,  3,  3|,  4,  4£,  5,  5£  and  6  per  cent  per 
annum. 


00 

2 

2i 

3 

H 

4 

*h 

5 

54 

6 

a) 

3 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

per  Cent. 

ser  Cent 

i 

1.000 

1.000 

1.000 

1.000 

1.000 

1.000 

1.000 

1.000 

1.000 

2 

2.020 

2.025 

2.030 

2.035 

2.040 

2.045 

2.050 

2  055 

2.060 

3 

3.060 

3.076 

3.091 

3.106 

3.122 

3.137 

3.153 

3.108 

3.184 

4 

4.122 

4.153 

4.184 

4.215 

4.246 

4.278 

4.310 

4.342 

4.375 

5 

5.204 

5.256 

5.309 

5.362 

5.416 

5.471 

5.526 

5.581 

5.637 

6 

6  308 

6.388 

6.468 

6.550 

6.633 

6.717 

6  802 

6.888 

6.975 

7 

7.434 

7.547 

7  662 

7.779 

7.898 

8.019 

8.142 

8.267 

8.394 

8 

8.583 

8.736 

8.892 

9.052 

9.214 

9.380 

9.549 

9.722 

9.897 

9 

!) .  755 

9.955 

10.159 

10.368 

10.583 

10.802 

11.027 

11.256 

11.491 

10 

10.949 

11.203 

•  11.464 

11.731 

12.006 

12.288 

12.578 

12.875 

13.181 

11 

12.168 

12.483 

12  808 

13.142 

13  486 

13.841 

14.207 

14.583 

14.972 

12 

13.412 

13.796 

14.192 

14.602 

15.026 

15.464 

15.917 

16.385 

16.870 

13 

14.680 

15.140 

15.618 

16.113 

10.627 

17.160 

17.713 

18.287 

18.882 

14 

15.973 

16.519 

17.080 

17.677 

18.292 

18.932 

19.599 

20.292 

21.015 

15 

17.293 

17  932 

18.598 

19.296 

20.024 

20.784 

21.579 

22.409 

23.276 

16 

18.639 

19.380 

20.157 

20.971 

21.825 

22.719 

23.657 

24.641 

25.673 

17 

20.012 

20.864 

21.762 

22.705 

23.698 

24.742 

25.840 

26.996 

28.213 

18 

21.412 

22.386 

23.414 

24.499 

25.645 

20.855 

28.132 

29.481 

30.906 

19 

22.840 

23.946 

25.117 

20.357 

27.671 

29.064 

30.539 

32.103 

33.760 

20 

24.297 

25.545 

26.870 

28.279 

29.778 

31.371 

33.066 

34.868 

36.786 

21 

25.783 

27.183 

28.076 

30.209 

31.969 

33.783 

35.719 

37.786 

39.993 

22 

27.299 

28.863 

30.537 

32.329 

34.248 

36.303 

38.505 

40.864 

43.392 

23 

28.845 

30.584 

32.453 

34.400 

36.618 

38.937 

41.430 

44.112 

46.996 

24 

30.422 

32.349 

34.420 

36.066 

39.083 

41.689 

44.502 

47.538 

50.816 

25 

32.030 

34.158 

36.459 

38.950 

41.646 

44.565 

47.727 

51.153 

54.865 

26 

33.671 

36.012 

38 . 553 

41.313 

44.312 

47.571 

51  113 

54.966 

59.156 

27 

35.344 

37.912 

40.709 

43.759 

47.084 

50.711 

54.669 

58.989 

63.706 

28 

37.051 

39.860 

42.931 

46.290 

49.968 

53.993 

58.403 

63.233 

68  528 

29 

38.792 

41.856 

45.219 

48.911 

52.966 

57.423 

62.323 

67.711 

73.640 

30 

40.568 

43.902 

47.575 

51.622 

56.085 

61.007 

66.439 

72.435 

79.058 

31 

42.379 

46.000 

50.003 

54.429 

59.328 

64.752 

70.761 

77.419 

84.802 

32 

44.227 

48.150 

50.503 

57.334 

62.701 

68.666 

75.299 

82.677 

90.890 

33 

46.111 

50.354 

55.078 

60.341 

66.210 

72.756 

80.064 

88.225 

96.343 

34 

48.034 

52.013 

.-.7.730 

63.453 

69.858 

77.030 

85.067 

94.077 

104.184 

35 

49.994 

54.928 

60.462 

66.674 

73.652 

81.497 

90.320 

100.251 

111. 435 

36 

51.994 

57.301 

63.276 

70.007 

77.598 

86.164 

95.836 

106.765 

119.121 

37 

54.084 

59.734 

66.174 

73.458 

81.702 

91.041 

101.628 

113.637 

127.268 

38 

56.115 

37.222 

69.159 

77.029 

85.970 

96.138 

107.709 

120.887 

135. 904 

39 

58.237 

63.478 

72.234 

80.725 

90.409 

101.464 

114.095 

128.636 

145.058 

40 

60.402 

63.740 

75.401 

84.550 

95.026 

107.030 

120.800 

136.606 

154.762 

To  ascertain  the  amount  which  should  be  in  a  sinking  fund  at  any  given  time,  multiply  the 
annual  deposit  by  the  amount  which  $1.00  earns  in  the  time  required  at  the  rate  per  cent  as 
found  in  the  above  table. 

Example:  Required  to  find  amount  which  should  be  in  a  sinking  fund  (maturing  in  20 
years)  at  the  end  of  the  tenth  year;  annual  deposil  $250,  at  3  per  cent.  One  dollar  for  ten  yean 
at  3  percent  produces  $11,464,  and  tins  multiplied  by  $250  =  $2866.00,  the  amount  which  will 
be  in  the  fund  if  it  has  been  maintained  at  its  proper  standard. 


SINKING     FUND    TABLE. 

Amounts  to  be  set  aside  and  invested  yearly,  for  the  following  number  of  years  respectively,  at 
any  rate  of  interest  from  2  to  6  per  cent,  in  order  to  produce   ($1,000,000)  one  million 


dollars. 


'Interest  earned  payable  yearly. 


RATE  OF  INTEREST. 


$ 

19-2158 

158526 

134512 

116509 

102515 

91326 

57825 

41156 

31220 

24649 

16555 

11823 

8767 

6667 

5855 

5160 

4406 

3202 


2i 


41  191200 
00 1 157534 


44 

$ 

183707 

149817 

125652 

107564 

93529 

82330 

49020 

32719 

23214 

17098 

9918 

6060 

3811 

2439 

1960 

1578 

1027 


1335(10 

115484 

101481 

90287 

56788 

40142 

30235 

23699 

15677 

11018 

8035 

6004 

5225 

4563 

3511 

2725 

4i 

$ 

182791 

148878 

124701 

106609 

92574 

81378 

48113 

31876 

22439 

16391 

9343 

5602 

3454 

2165 

1721 

1370 

873 

558 


2h 


% 

190246 

156549 

132495 

114467 

100456 

89258 

55766 

39147 

29275 

22777 

14836 

10258 

7353 

5397 

4653 

4026 

3038 

2311 


22 


$ 
88  189298 


$ 
t  181880 


147945 

123757 

105661 

91628 

80436 

47221 

31050 

21685 

15709 

8796 

5174 

3127 

1919 

1509 

1188 

740 

462 


155570 

131497 

113457 

99440 

88239 

54759 

38171 

2833!) 

21884 

14031 

9540 

6720 

4842 

4135 

3543 

2621 

1954 


22  188354 

841154597 

46  130506 

3  112456 

98433 

87230 

53766 

37215 

27427 

21019 

13262 

8865 


180974 

147017 

122819 

104721 

90690 

79504 

46342 

30242 

20952 

15051 

8278 

4776 

2828 

1699 

1321 

1029 

627 

383 


6132 
4336 
3667 
3111 
2255 
1646 

51 

$ 

180073 

146095 

121888 

103789 

89760 

78581 

45477 

29452 

20240 

14416 

7786 

4406 

2555 

1502 

1156 

890 

530 

316 


34 


$ 
187415 
153629 

129522 

111462 

97435 

86231 

52788 

36278 

26539 

20181 

12527 

8230 

5589 

3877 

3247 

2726 

1936 

1383 

5* 

$ 
32  179176 


c  !  $ 

60  186481 
97)152668 
041128544 
63  110476 
55  96446 
07  85241 
58  51825 
88  35361 
33  25674 
72  19371 
11827 
7633 
5088 
3460 
2869 
2384 
1657 
1159 

51 


31 


5  185551 


94 


94 


145178 

120964 

102864 

88839 

77667 

44625 

28679 

19549 

13805 

7320 

4061 

2307 

1327 

1010 

769 

447 

261 


178284 

144268 

120046 

101946 

87926 

76763 

43787 

27923 

18878 

13216 

6879 

3741 

2081 

1171 

881 

664 

377 

215 


151712 

127573 

109498 

95465 

84261 

50875 

34462 

24831 

18587 

11159 

7074 

4626 

3084 

2530 

2081 

1416 

968 

6 


$ 

177396  40 

143362  63 

119135  02 

101035  95 

87022  24 

75867 

42962 

27184  56 

18226  72 

12648  92 

6461  54 

3444  29 

1875  73 

1033  13 

768  67 

572  55 

318  37 

177  36 


$    c 

184627  12 

150761  91 

126609  62 

108527  84 

94493  00 

83290  95 

49941  10 

33581  75 

24011  97 

17830  10 

10523  49 

6550  20 

4201  85 

2745  07 

2229  01 

1814  08 

1207  76 

808  00 


Explanatory:  For  amounts  less  than  a  million,  the  proportion  of  the  above  figures  will  give 
the  required  sum.  Thus,  for  $20,000,  payable  in  20  years,  the  interest  on  the  sinking  fund 
assumed  to  be  3  per  cent,  take  $37215.71  as  that  required  for  $1,000,000,  and  dividing  by  100  we 
get  $372.15|  for  $10,000,  which  multiplied  by  2  =  $744.3H,  the  amount  required  for  $20,000.  In 
other  words,  the  annual  sinking  fund  given  in  the  above  table,  multiplied  by  the  amount  of  the 
debentures  and  divided  by  1,000,000,  gives  the  sinking  fund  required. 

Attention  is  again  called  to  the  fact  that  it  is  unsafe  to  calculate  on  the  sinking  fund  earnintr 
more  than  Savings  Bank  interest. 


SHORT  TERM  DEBENTURES. 


9  Per  Cent.— 2  Years. 

EQUAL  ANM  ai.   PAYMENT, 

1515,049.51. 

3  Per  Cent.— 2  Years. 

I.. ,n    \i.   wsi  AL   PAYMENT, 

$522,610.84 

Per  Cent.— 2  Years. 

l.i.H    \1,  ANNUAL    PAYMENT, 

$530,196.07. 

Each 
Year. 

Interest. 

Principal. 

Kadi 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest.       Principal. 

1 
o 

$30000  00 
15221  68 

$  492610  84 
507389  16 

1 
2 

$40000  00   $  490196  07 

1 
2 

$20000  00 
10099  02 

$  495049  51 
504950  49 

$1000000  00 

$1000000  00 

SI 000000  00 

3  Per  Cent.  -3  Years. 
EQUAL  ANNUAL  PAYMENT, 

$353,530.36. 

4  Per  Cent.— 3  Years. 

2  Per  Cent. —3    Years. 

$360,348.53. 

EQUAL  ANNUAL  PAYMENT, 

$346,754.68 

Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

Interest. 

Principal. 

1 
2 
3 

$30000  00 
2H294  08 
lie".  17  00 

s  :{2:{.-,:«i  36 
333236  28 
343233  36 

$1(100000  00 

Each 
Year. 

1 
2 
3 

$40000  00 
27186  05 
13859  54 

$  320348  53 
333162  48 
346488  99 

1 

$20001 

L3464  90 
67W  14 

$  326754  68 
333289  78 
339955  54 

2 

sinoHioo  nn 

3 

3  Per  Cent.— 4  Years. 

EQUAL   ANNUAL  PAYMENT, 

$269,026.87. 

•$1000000  00 

EQUAL  ANNUAL   PAYMENT, 

2    Per     Cent.- 4  Years. 

EQUAL  ANNUAL  PAYMENT, 

§262,623.64. 

Each 
Year. 

Interest. 

Principal. 

$275,490.24. 

Each 
Year. 

Interest. 

Principal. 

1 

3 
4 

$30000  00 
22829  14 
16443  26 

7835  08 

$  239026  87 
240197  73 
253583  61 
261191  79 

Each 

Interest. 

Principal. 

Year 

1 
2 
3 
4 

$40000  00 
30580  39 
20783  99 
10596  ;>8 

$  235490  24 
244909  85 
254706  25 

1 

s-jnnnn  mi 
15147  52 
10198  00 
5149  04 

$  242623  64 
217476  12 
252425  (14 
257474  60 

2 
3 

$1000000  00 

264893  66 

4 

3  1-2  Per  Cent.  -2  Years. 

EQUAL  ANNUAL   PAYMENT, 

$526,400.49. 

$1000000  O'l 

§1000000  00 

4  1-2  Per  Cent.— 2  Years. 

2  1-2  Per  Cent.— 2  Year*. 

EQ1  AL  ANNUAL  PAYMENT, 

$518,827.16. 

Each 
Year. 

Interest. 

Principal. 

$533,996.47. 

Each 
Year. 

1 
2 

Interest. 

Principal. 

Each 

Interest. 

Principal. 

'^  ear. 

1 
2 

$35000  00 
17800  98 

$  491400  49 
508599  51 

$1000000  00 

S45I 

22992  94 

$  488996  47 
511003  53 

2 

$25000  00 
12654  32 

$  493827  16 
506172  84 

$1000000  00 

slim nn 

3  1-2  Percent.— 3  Years. 

EQUAL  ANNUAL    PAYMENT, 

$356,931.59. 

4  1-2  l'er  Cent.— 3  Years. 

2  1-2  Per  Cent.—  3  Years. 
EQUAL  ANNUAL   PAYMENT, 

$350,136.63. 

EQUAL  ANNUAL    PAYMENT. 

$363,773.86. 

Each 
Year. 

1 
2 
3 

Interest. 

$45000  00 
30654  95 
15666  63 

Each 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

Principal. 

1 
2 
3 

$25000  00 
16871   58 
8538  31 

$  325136  63 
' 333265  05 
341598  32 

1 
2 
3 

$35000  00 
2:;7:;2  39 
12062  38 

$  321931  59 
3331! Ml  20 
344869  21 

S|( (Mill    (III 

$  318773  86 
3331  IS  ill 
348107  23 

slum n  nn 

$1000000  00 

2  1   2    IVr  (fn(     1    Vrars. 
BQ1    \i.  ANN!    w.  PAYMENT, 

$265,817.62. 

3  1-2  IVr  Cent.— 4  fears. 

EQUAL   wm    \i-    r\\  BIENT. 

$272,250  17. 

1  1-8   l*er  Cent.-4  Years. 

EQ1   \i.   INN1   u.   P  \t  \n;\r, 

$278,744,49. 

Each 
Sfear. 

Interest. 

Principal. 

Each 

Near. 

Interest. 

1'iincipal. 

Each 
Year. 

interest. 

$45000  00 
34481  49 
23489  66 
L2O08  8] 

Principal 

1 
2 
8 
4 

$25000  00 
L8978  56 
12808  60 
6482  32 

|  240817  62 
246838  06 
253009  02 
259335  30 

1 
2 

3 

4 

$35 1  00 

26696  21 
18101  85 

92(i2  49 

-  237250  17 
245553  93 
2541  is  22 

263(»I7  68 

1 
•_> 

3 
4 

$  233744  49 
244263  no 
255254  83 
266737  68 

$1000000  00 

81000000  00 

sinnoooo  on 

5  Percent.— a  Years. 

EQUAL   ANNUAL  PAYMENT. 

$537,804.87, 

5  1-2  Per  Cent.— 2  Years. 

EQUAL  ANNUAL  PAYMENT. 
$541,518.00. 

6  Per  Cent.  — 2  Years. 

EQUAL  ANNUAL  PAYMENT. 

$545,436.88. 

Kacli 
Year. 

Interest. 

Principal. 

Each 
Year. 

Ineerest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

1 
2 

$50000  00 
25609  74 

$  487804  87 
512195  13 

$1000000  00 

1 
2 

$55000  00 
28216  00 

$  486618  00 
513382  00 

1 
2 

$60000  00 
30873  76 

$  485436  88 
514563  10 

$1000000  00 

$1000000  00 

5  Per  Cent.— 3  Years. 

EQUAL  ANNUAL  PAYMENT. 

$367,208.56. 

5  1-2  Per  Cent.— 3  Years. 

EQUAL  ANNUAL  PAYMENT. 

$370,654.57. 

6  Per  Cent.— 3  Years. 

EQUAL  ANNUAL  PAYMENT. 

8374,109.81. 

Each 
Year. 

Intarest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

1 
2 
3 

$50000  00 
34139  57 
17486  11 

$  317208  56 
333068  99 
349722  45 

1 
2 
3 

$55000  00 
37638  99 
19324  72 

$  315654  57 
333015  58 
351329  85 

1 
2 
3 

$60000  00 
41153  41 
21176  02 

$  314109  81 
332956  40 
352933  79 

$1000000  00 

$1000000  00 

$1000000  00 

5  Per  Cent.— 4  Years. 

EQUAL  AXNUAL  PAYMENT. 

$282,011.56. 

5  1-2  Per  Cent.— 4  Years. 

EQUAL  ANNUAL  PAYMENT. 

$285,294.82. 

C  Per  Cent.— 4  Years. 

EQUAL  ANNUAL  PAYMENT. 

$288,591.80. 

Each 
Year. 

Interest. 

Principal. 

Each 
Year. 

Interest. 

Principal. 

Year. 

Interest. 

Principal. 

1 
2 
3 
4 

$50000  00 
38399  42 
26218  81 
13428  01 

$  232011  56 
243612  14 
255792  75 
268583  55 

1 
2 
3 
4 

$55000  00 
42333  78 
28970  92 
14874  58 

$  230294  82 
242961  04 
256323  90 
270420  24 

1 
2 
3 
4 

$60000  00 
46284  50 
31746  05 
16336  65 

$  228591  80 
242307  30 
256845  75 
272255  15 

$1000000  00 

$1000000  00 

$1000000  00 

PART  V. 


Corporation  Accounting. 


Corporation   Accounting* 

CHAPTER  I. 
a.  a. 

General  Description  of  Corporations  and  their  Objects. 

WHAT  IS  A  CORPORATION? 

A  PRIVATE  corporation  is  a  collection  of  individuals  under  a  special 
denomination  authorized  by  law  to  act  as  one  person  for  certain 
specified  purposes,  and  endowed  by  law  with  the  capacity  of  perpetual 
succession,  so  that  the  corporate  body  remains  the  same  so  long  as  it  exists, 
notwithstanding  the  changes  in  its  individual  membership. 

Corporations  are  aggregate  or  sole.  An  aggregate  corporation,  as  its 
name  implies,  consists  of  several  persons  united  in  one  society,  preserved  by 
a  succession  of  members.  A  corporation  sole  consists  of  only  one  person, 
who  is  made  a  body  corporate  and  political,  in  order  that  he  and  his  suc- 
cessors may  possess  that  legal  perpetuity  which  is  denied  to  natural  persons. 
These  are  few  in  number,  being  mainly  officers  empowered  by  statute  to 
maintain  action  as  successors,  such  as  judges  of  probate  and  county  treas- 
urers. A  minister  of  a  parish,  seized  of  parsonage  lands  in  the  right  of  his 
parish,  holds  the  same  to  himself  and  successors,  and  has  been  held  in  law  to 
be  a  sole  corporation  for  that  purpose.  The  grant,  however,  of  corporate 
powers  to  one  person  and  his  associates,  although  not  requiring  him  to  take 
any  associate  before  exercising  the  rights  conferred,  and  thus  virtually  con- 
ferring upon  him  the  power  to  exercise  alone  all  the  corporate  functions 
thereby  granted,  does  not  make  of  him  a  corporation  sole.  The  State  has, 
in  this  case,  created  a  corporation  aggregate,  and  such  it  must  remain.  The 
governor  of  a  state  is  also  a  quasi  corporation  sole,  and  other  instances  will 
doubtless  suggest  themselves  to  the  reader. 

CORPORATIONS  ARE  PUBLIC  OR   PRIVATE). 

The  chief  distinction  between  public  and  private  corporations  is  that 
over  the  former  the  legislature  has  exclusive  and  unrestricted  control.  As 
the  guardian  of  public  interests,  it  may  create,  modify  or  destroy  such  insti- 
tutions. They  are  only  the  auxiliaries  of  the  government  in  municipal  rule, 
and  nothing  like  a  contract  can  be  claimed  to  exist  between  them  and  the 
legislature,  their  objects  and  duties  being  incompatible  with  anything  of  the 
nature  of  a  compact.  Private  corporations,  on  the  other  hand,  are  created 
by  the  granting  of  a  charter,  either  under  the  general  laws  of  the  state  or  by 
special  act  of  the  legislature,  which,  in  connection  with  the  acceptance,  by  the 
corporation,  of  such  charter,  is  regarded  as  a  compact,  binding  upon  the  state 
so  long  as  the  body  corporate  faithfully  fulfills  its  part. 


Generally  speakng,  public  corporations  are  towns,  cities,  parishes,  etc., 
existing  for  political  purposes  only,  with  powers  to  be  exercised  for  the 
public  good.  Private  corporations  are  such  as  banks,  insurance  companies, 
railroads,  furnaces,  mining  or  other  organizations  in  which  the  stock  is 
owned  by  individuals  for  their  personal  profit. 

Railroad,  turnpike,  steamship  and  some  other  companies  are  frequently 
called  quasi-public  corporations,  because  of  their  public  utility,  and  because 
the  public  have  cerain  rights  therein,  but  nevertheless,  they  are  private  cor- 
porations. The  state  may  own  an  interest  in  a  company  as  one  of  the 
corporators,  but  does  not.  by  such  participation,  identify  itself  with  the 
corporation.  Perhaps  no  institution  in  the  world  is  so  generally  misunder- 
stood in  this  respect  as  the  Bank  of  England,  which  although  so  closely  con- 
nected with,  and  so  important  a  factor  in,  the  financial  politics  of  that  coun- 
try, is  entirely  a  private  corporation.  Chief  Justice  Marshall  says :  "It  is 
a  sound  principle  of  law  that  when  a  government  becomes  a  partner  in  a 
trading  company,  it  divests  itself,  so  far  as  concerns  the  transactions  of  that 
company,  of  its  sovereign  character,  and  takes  that  of  a  private  citizen." 
But  where  a  corporation  is  composed  exclusively  of  officers  of  the  govern- 
ment, having  no  personal  interest  in  such  corporation,  and  only  acting  as  the 
organ  of  the  state,  for  the  public  good,  it  is  a  public  corporation. 

The  general  meaning  of  the  word  public  must  not  be  confounded  with  its 
legal  sense  in  this  connection.  A  turnpike,  for  instance,  is  for  the  public  use 
and  benefit,  but  the  turnpike  company  is  a  private  corporation.  A  hospital 
founded  by  private  benefaction  is,  in  point  of  law,  a  private  corporation, 
although  dedicated  by  its  charter  to  public  charity.  And  a  college,  founded 
and  endowed  in  the  same  manner,  though  for  the  general  promotion  of 
learning,  is  private. 

A  private  corporation  is  further  distinguishable  from  a  municipal 
corporate  body,  by  the  irresponsibility  of  the  members  for  the  corporate 
debts  beyond  the  amount  of  their  interest  in  the  corporate  fund.  Towns, 
etc.,  being  established  only  for  political  and  civil  purposes,  hold  each  member 
of  the  same  liable  in  his  private  estate,  his  individual  property  being  subject 
to  taxation  to  meet  the  corporate  needs. 

Private  corporations  are  of  several  kinds,  the  first  division  being  into 
ecclesiastical  and  lay. 

ECCLESIASTICAL   CORPORATIONS 

Are  such  as  are  incorporated  for  the  promotion  of  religion,  and  usually 
established  for  the  advantageous  management  of  the  property  belonging  to 
the  church.    They  may  be  either  sole  or  aggregate. 

LAY  CORPORATIONS 

Are  divided  into  eleemosynary  and  civil. 

ELEEMOSYNARY  CORPORATIONS 

May  be  described  as  incorporated  charities,  their  object  being  the  perpetual 
distribution  of  benefits  as  directed  by  the  founders:  Under  this  head  are  such 
institutions  as  hospitals  for  the  poor,  asylums  for  the  insane,  etc.  Also  those 
colleges  or  schools  whose  members  receive,  from  the  funds  of  the  institution, 
pecuniary  assistance  in  meeting  the  expenses  attending  their  academical 


course.  Angell  and  Ames  mention,  as  an  instance  of  eleemosynary  corpor- 
ations, "Dartmouth  College,  in  New  Hampshire,  because  it  was  founded  by 
private  benefactors  for  the  distribution  of  private  contributions." 

But  most  of  our  larger  institutions  of  learning  are  not  eleemosynary 
corporations,  although  they  may  owe  their  existence  to  private  or  public 
donations,  because  their  funds  are  paid  to  professors  and  others  as  remun- 
eration for  services  rendered,  rewards  for  special  proficiency,  etc.;  so  that 
the  benefits  are  earned  by  those  who  receive  them,  and  by  no  means  accepted 
as  gifts  of  charity.  Take,  for  example,  Harvard  College,  the  earliest  known 
institution  of  the  sort  on  this  continent,  whose  invested  funds  have  increased 
from  the  $2,000  (£400)  given  in  A.  D.  1636,  by  the  English  colonists,  to  the 
comfortable  sum  of  about  $4,000,000,  almost  entirely  the  result  of  private 
munificence.  Notwithstanding  the  fact  that  its  14,000  alumni  are  decidedly 
the  beneficiaries  of  these  generous  gifts,  it  is  not  eleemosynary,  in  our  sense 
of  the  word.  Nor  it  is  a  public  corporation,  although  its  charter  of  A.  D. 
1650  declared  its  object  to  be  "the  education  of  the  English  and  Indian  youth 
in  knowledge  and  godliness,"  and  its  present  alumni  are  gathered  from  every 
state  in  the  Union. 

CIVIL  CORPORATIONS. 

These  corporations  are  sometimes  public,  as  towns,  etc.,  but  they  also 
embrace  those  numerous  private  corporations  created  for  the  building  and 
operating  of  railroads,  mining,  smelting,  banking,  insurance,  and  an  almost 
endless  variety  of  other  business,  in  the  interest  and  for  the  profit  of  their 
stockholders.  The  term  "Joint  Stock  Company"  is  frequently,  but  erron- 
eously, applied  to  these  institutions.  Although  in  the  statutes  of  Massachu- 
setts those  words  meant  a  corporation,  yet,  generally  speaking,  they  are  a 
dangerous  misnomer.  A  purchaser  of  stock  in  a  joint  stock  company, 
properly  so  called,  becomes  a  partner  as  well  as  a  stockholder,  and  is  as  fully 
liable  for  the  debts  of  the  institution,  and  is  a  member  of  an  ordinary 
co-partnership  for  those  of  his  firm. 

Cook  says  a  joint  stock  company  is  "an  association  of  persons  for  the 
purpose  of  business,  having  a  capital  stock  divided  into  shares,  and  governed 
by  articles  of  association  which  prescribe  its  objects,  organization  and  pro- 
cedure, and  the  rights  can  not  release  the  members  from  their  liability  as 
partners  to  the  creditors  of  the  company."  The  definition  given  by  Beach  is, 
"A  partnership  whereof  the  capital  is  divided  into  shares  which  are  trans- 
ferable without  the  express  consent  of  all  the  co-partners."  I  would  advise 
anyone  doing  business  with  a  joint  stock  company,  to  acquaint  himself  with 
the  laws  governing  such  bodies  in  the  state  wherein  that  particular  company 
is  located ;  for  although  they  are  now  very  generally  recognized  as  legitimate 
organizations,  yet  this  was  not  the  case  from  1720  to  1826.  and  I  believe 
that  in  at  least  two  states,  Illinois  and  Louisiana,  they  are  still  held  to  be 
illegal.  On  the  other  hand,  some  state,  New  York  for  instance,  have 
conferred  upon  these  associations  such  extensive  statutory  privileges  that 
they  are  almost  corporations. 

LIMITED  PARTNERSHIPS. 

A  limited  partnership  still  more  nearly  approaches  the  character  of  a 
private  corporation.  The  statutes  generally  provide  that  limited  partner- 
ships may  consist  of  one  or  more  general  partners  whose  liabilities  are  the 


same  as  in  a  common  partnership;  and  of  one  or  more  special  partners,  who 
shall  contribute  to  the  common  funds  a  specific  sum  in  actual  cash,  after 
payment  of  which  sum  they  shall  not  be  further  liable  for  the  debts  of  the 
partnership.  A  deed  or  certificate  setting  forth  this  agreement  in  full,  signed 
by  all  the  partners,  is  registered  in  the  public  records  of  each  county  where 
the  business  is  to  be  carried  on,  and  publication  made  thereof  in  the  news- 
papers or  such  other  manner  as  the  statutes  may  prescribe. 

We  have  now  seen  that  corporations  are  public  or  private ;  that  private 
corporations  are  ecclesiastical  or  lay ;  that  lay  corporations  are  eleemosynary 
or  civil ;  and  how  these  last  are  to  be  distinguished  from  joint  stock  com- 
panies and  limited  partnerships. 

4.   4.   4.   4. 

CHAPTER   II. 

4.    X 

Organization  of  Corporations. 


WHENEVER  a  corporation  is  to  be  formed  it  is  usual  for  those  inter- 
•  ested  to  draw  up  certain  papers,  called  articles  of  incorporation,  and 
forward  them  to  the  secretary  of  state.  He  issues  a  permit  of 
organization  and  after  some  preliminary  steps  the  company  is  given  a  charter 
and  is  allowed  to  proceed  to  business.  One  of  the  most  common  steps  to  be 
taken  before  operations  can  be  commenced  is  the  announcement  of  the  object 
of  the  company  and  also  the  amount  of  capital  stock.  The  money  contributed 
is  called  the  capital  stock,  or  the  capital.  Each  member  receives  a  paper, 
called  a  certificate  of  stock,  signed  by  the  officers  of  the  corporation,  stating 
what  proportion  of  the  capital  is  his.  This  amount  need  not  all  be  paid  in 
at  one  time,  however,  though,  of  course,  at  some  time  the  whole  amount  of 
the  capital  must  be  paid  into  the  company. 

The  reason  is  obvious :  persons  doing  business  with  the  company  have 
a  right  to  know  just  what  the  powers  of  the  company  are,  and  also  they  trust 
the  company  on  the  strength  of  the  capital  stock  which  they  naturally  suppose 
has  actually  been  at  some  time  in  existence,  though  it  need  not  all  have  been 
paid  at  one  time.  An  illustration  will  make  this  a  little  more  clear.  Suppose 
that  five  persons  wish  to  form  a  corporation,  each  one  to  take  20  shares  of 
$100  par  value  each,  making  in  all  a  capital  stock  of  $10,000.  Upon  filing 
the  articles  with  the  secretary  of  state  and  getting  permission  to  organize, 
each  one  of  the  five  pays  into  the  company  10  per  cent  of  the  amount  he 
subscribed  for.  This  might  possibly  be  sufficient  to  start  the  business  and 
possibly  there  would  be  no  further  call  for  payment  on  the  stock.  Perhaps 
after  some  years  the  corporation  might  get  into  difficulty  and  then  the  stock- 
holders, whoever  they  might  be  at  the  time,  would  be  liable  for  the  unpaid 
portion  of  the  stock,  or  at  least  sufficient  of  to  satisfy  the  claim.  The  fact 
thai  the  holder  supposed  it  to  he  fully  paid  up,  and  paid  value  for  it  accord- 
ingly, does  n.it  render  him  the  less  liable.  Of  course  the  company  can 
purchase  at  a  fair  value  any  patents  or  other  tangible  effects  and  issue  stock 
to  pay  for  them, 

6 


The  corporate  body  existing  only  in  a  legal  sense  must  necessarily  have 
some  one  to  act  for  it,  and  this  is  accomplished  by  agents  usually  called  the 
"Board  of  Directors,"  or  "Trustees."  Although  by  no  means  absolutely 
essential  it  has  been  the  custom  of  the  law  to  permit  the  stockholders  to  elect 
the  directors,  but  it  is  only  a  matter  of  convenience  and  the  fact  does  not 
change  the  relation  of  the  stockholders  to  the  corporation,  which  is  solely  a 
contract  relation.  They  contribute  their  capital  and  in  return  get  a  share  of 
the  profits.  The  Board  of  Directors  generally  appoint  the  executive  officers. 
This  brings  us  to  a  consideration  of  the  powers  of  the  officers  of  a  cor- 
poration. The  officers  are  empowered  to  act  for  the  company  in  all  matters 
within  the  scope  of  the  object  of  the  corporation,  but  beyond  this  they  act 
only  on  their  own  responsibility  and  the  company  is  not  bound  by  their  acts. 
It  is  right  that  this  should  be  so  as  the  stockholder  advances  money  to  the 
corporation  to  be  used  for  a  specific  purpose  and  any  business  outside  of  that 
can  only  be  a  personal  matter  between  the  officer  and  the  person  doing  busi- 
ness with  him.  Therefore  before  going  into  any  extensive  transaction  with 
a  corporation  it  is  well  to  carefully  ascertain  the  nature  and  extent  of  the 
corporate  powers,  or  possibly  after  a  considerable  amount  of  money,  etc.,  has 
been  expended,  some  stockholder  may  come  along  with  an  injunction  claim- 
ing that  he  contributed  his  money  to  the  company  for  the  purpose  of 
railroading,  or  whatever  the  object  might  be,  and  not  for  trading  in  grain  or 
making  bicycles.  Then  the  person  doing  business  as  he  supposed  with  a 
corporation  of  unlimited  credit  hies  him  to  a  lawyer  and  soon  discovers  that 
the  particular  transaction  in  which  he  is  interested  is  "ultra  vires,"  or  beyond 
the  power  of  the  corporation.  He  certainly  has  increased  his  knowledge  of 
law  and  possibly  his  vocabulary,  for  which  his  lawyer  charges  him  a  good 
price  (the  more  difficult  and  uncommon  the  name  the  higher  the  fee  is 
usually) .  The  officers  may  not  even  be  liable,  or  if  so,  they  may  be  worthless 
individually. 

Sometimes  it  is  not  desirable  to  appear  as  the  holder  of  stock  in  a  cor- 
poration. Possibly  the  company  may  have  been  carelessly  organized,  or 
perhaps  the  stock  has  not  been  fully  paid  up.  Of  course  if  a  person  was 
contemplating  purchasing  the  stock  he  would  look  to  these  and  similar 
matters  before  closing  the  deal,  but  possibly  he  is  only  to  become  interested 
in  the  company  to  the  extent  of  holding  the  stock  as  security  for  a  debt.  In 
such  cases  the  better  way  is  to  take  the  certificate  and  a  writing  pledging  the 
same  and  have  such  security  entered  on  the  books  of  the  corporation.  This 
effects  the  object  desired  and  does  not  render  the  holder  liable.  It  is  surpris- 
ing how  many  persons  will  take  certificates  of  stock  as  security  and  simply 
hold  them  instead  of  going  tc  ^he  office  of  the  corporation  and  seeing  that 
the  transfer  is  properly  made,  for  in  most  cases  unless  this  is  done  there  is  a 
possibility  of  considerable  trouble  and  loss  arising,  as  the  records  of  the 
company  are  presumed  to  be  correct. 

A  corporation  is  possessed  of  a  perpetual  existence,  unless,  as  is  usually 
the  case,  the  law  provides  the  time  during  which  it  can  exercise  the  privileges 
accorded  it.  The  charter  may,  however,  be  voluntarily  forfeited,  or  under 
certain  conditions  it  may  be  compelled  to  relinquish  its  privileges.  Should 
all  individual  members  withdraw  or  die.  naturally  the  corporation  ceases  to 
exist  owing  to  the  lack  of  an  agent  to  act  for  it. 


CHAPTER   III. 

Corporation  Stock  Account  Books. 
*.  A. 

WHAT  most  troubles  a  novice  in  corporation  book-keeping  is,  not  in 
what  book  to  make  the  entries,  but  how  properly  to  make  them,  or 
how  to  make  them  at  all ;  and  inasmuch  as  no  coherent  method,  aside 
from  illustrative  examples  for  the  guidance  of  tyros,  appears  in  the  text 
books,  our  object  is  to  attempt  to  formulate  some  general  rules  which  will  be 
helpful  to  beginners. 

If  the  secretary  or  book-keeper  of  a  corporation  is  uncertain  as  to  the 
book  in  which  he  should  enter  the  record  of  a  particular  transaction  or  class 
of  transactions,  he  ought  to  make  it  a  point  to  ascertain,  if  possible,  the  best 
practice  in  that  regard.  Is  it  the  best  practice  to  make  the  entries  of  the 
Capital  Stock  account  in  the  "Stock  Books"  or  in  the  "Books  of  Account?" 
Before  a  satisfactory  answer  could  be  made,  the  inquiry  would  be:  What 
rue  "Stock  Books"  and  what  "Books  of  Account?" 

It  is  to  be  taken  for  granted  that  the  corporation  to  which  reference  has 
been  and  is  being  made  is : 

A  private  tion  for  pecuniary  profit. 

That  only  one  set  of  books  of  account  are  kept  to  show  the  results  of  the 
business;  and 

That  the  only  books  in  which  the  stockholders'  names  exclusively  appear 
are  those  which  will  show  the  officers  of  the  corporation  who  are  its  stock- 
holders and  who  are  entitled  to  vote  at  stockholders'  meetings. 

In  the  United  Kingdom  the  laws  with  respect  to  corporations  are 
uniform,  and  are  more  stringent  in  their  regulations  than  with  us.  It  appears 
that  certain  books  must  be  kept :  that  the  books  must  be  audited  annually  by 
\  chartered  auditor,  and  that  the  auditor's  suggestions  as  to  how  the  books 
fhould  be  kept  are  followed  as  a  rule. 

The  Corporation  stock  books  required  by  an  English  Public  Company 
Ire  as  follows : 

i.     Register  of  Members. 

2.  Diractors'  Minute  Book. 

3.  Minute  Book  of  General  Meetings. 

4.  Register  of  Transfers. 

5.  Register  of  Mortgages. 

6.  Register  of  Documents. 

7.  Share  Certificate  Book. 

8.  Seal  Book. 

« >.      Annual  Summary  of  Capital  Book. 
10.     Directors'  Attendance  Book. 
Those  required  by  an  American  Private  Corporation  are  as  follows: 

1.  Bool:  of  By-Laws. 

2.  Minute  Book. 

3.  Stock-  Certificate  Book. 
5..     Transfer  Journal. 

5.  Trnu  if  1  r  Ledger. 

6.  Bond  Register, 


The  Canadian  practice  as  to  the  use  of  the  "Stock  Ledger"  is  thus 
explained : 

"Stock  Ledger."  The  use  of  a  stock  ledger  will  be  apparent  if  you 
consider  how  difficult  it  would  be  to  keep  an  account  in  the  general  ledger 
with  the  individual  stockholders  of  a  company  who  hold  stock  to-day  and 
part  with  it  to-morrow,  as  is  done  with  the  individual  partners  of  an  ordinary 
business  whose  interest  is  permanent.  This  hook,  therefore,  contains 
nothing  but  the  name  and  address  of  each  shareholder,  the  number  of  shares 
of  the  "capital  stock  of  the  company  held  by  each,  and  the  installments  that 
have  been  paid  upon  them. 

As  a  matter  of  fact  these  corporation  stock  books  are  very  seldom  used 
by  small  companies.  In  large  companies  where  the  stockholders  are  numer- 
ous and  especially  where  shares  have  a  market  value  they  are  undoubtedly 
unnecessary. 

Under  our  system  of  incorporation  through  general  laws,  a  corporation 
is  created  upon  the  execution,  by  persons  desirous  of  incorporating,  of 
articles  of  incorporation,  the  filing  of  such  articles  in  certain  designated 
offices,  and  the  certification  of  same  by  specified  public  officers;  when  this 
instrument  is  executed,  filed  and  certified  to  as  required,  the  corporation 
instantly  comes  into  legal  existence. 

Although  now  regularly  formed,  the  corporation  cannot  act ;  being  an 
artificial  person,  it  must  act  by  means  of  agents,  and  it  has  no  agents.  Incor- 
poration must  be  followed  by  organization.     Organization  means  : 

i.  The  adoption,  by  the  stockholders,  of  by-laws  for  the  government 
of  the  corporation. 

2.  The  election,  by  the  directors,  of  officers  to  transact  the  corpora- 
tion business. 

3.  The  providing  for  payments  to  the  capital  stock,  and  for  the  issu- 
ance to  the  shareholder  of  evidences  of  their  holdings,  and  the  taking  of 
such  further  steps  as  may  be  necessary  to  endow  the  legal  entity  with 
capacity  to  carry  on  the  business  for  which  it  was  created. 

The  Book  of  By-Laws  is  evidence  that  by-laws  have  been  adopted. 

The  Minute  Book  is  evidence  of  who  the  officers  are,  and  of  all  other 
acts  and  proceedings  of  the  Board  of  Directors. 

The  Transfer  Journal  and  Transfer  Ledger  are  evidence  of  who  the 
stockholders  are.  Upon  the  original  issue,  and  any  subsequent  transfers, 
the  Stock  Certificate  Book,  Transfer  Journal,  Transfer  Ledger  and  seal  are 
brought  into  requisition. 

The  registration  of  stock  required  by  statutes  serves  a  two-fold  purpose, 
viz. : 

To  provide  the  corporation  officers  with  a  record  of  who  are  the  mem- 
bers of  the  corporation ;  and 

To  provide  creditors  with  a  record  of  those  who  are  individually  liable 
in  case  the  corporation  becomes  unable  to  meet  its  obligations.  The  general 
rule  is  that  the  books  of  the  corporation  furnish  evidence  as  to  what  persons 
are  entitled  to  the  rights  and  privileges  of  stockholders,  and  as  to  \ 
creditors  may  look  for  payment  in  the  event  of  the  insolvency  of  the  corpora- 
tion. Creditors  of  a  corporation  are  presumed  to  have  relied  upon  the 
books. 

9 


CHAPTER   IV. 

Illustrations  of  Opening  Entries 
4.  *. 

EXAMPLE   NO.    I. 

FOR  THK  sake  of  greater  clearness  in  the  entries  let  us  assume  that  the 
authorized  capital  of  the  company  is  $100,000,  divided  into   1,000 
shares  of  $100  each,  that  B.  Brown  has  subscribed  for  400  shares,  S. 
Smith  300  shares  and  J.  Jones  300  shares.     We  "open"  the  stock  books  by 
entering-  on  the  stock  daybook: 

Subscription    $100,000  00 

To  capital  stock $100,000  00 

For  subscriptions  as  follows: 

B.  Brown,  400  shares  @  $100 $40,000  00 

S.  Smith,  300  shares  @  $100 30,000  00 

J.  Jones,  300  shares  @  $100 30,000  00 

Sunds   to   Subscription.*. $100,000  00 

B.  Brown,  yr.  sub.  400  shares 40,000  00 

S.  Smith,  yr.  sub.  300  shares 30,000  00 

J.  Jones,  yr.  sub.  300  shares 30,000  00 

Or  subscription  account  may  be  omitted  and  the  several  subscribers 
charged  with  the  amount  of  their  subscriptions  and  capital  stock  credited 
direct.  If  we  dispense  with  the  stock  day  book,  enter  the  same  facts  in  full 
on  the  several  accounts  in  the  stock  ledger,  making  it  a  book  of  original 
entry. 

Our  books  are  now  "open"  and  record  the  facts.  The  several  sub- 
scribers are  indebted  to  the  company  for  the  amount  of  their  subscriptions 
and  the  entire  authorized  capital  of  the  company  is  invested  in  these  accounts. 
All  future  entries  are  merely  records  of  actual  transactions  or  changes  in 
position  or  form  of  the  assets  of  the  company.  ■  When  the  capital  (or  these 
accounts)  is  paid,  we  enter  : 

Paid-up  capital $100,000  00 

B.  Brown,  yr.  sub.  paid  in  full $40,000  00 

S.  Smith,  yr.  sub.  paid  in  full 30,000  00 

J.  Jones,  yr.  sub.  paid  in  full 30,000  00 

The  stock  ledger  then  has  but  two  open  accounts.  Capital  Stock,  which 
is  credited  with  the  amount  of  the  authorized  and  subscribed  capital  and 
"Paid-up  Capital,"  which  is  debited  with  the  amount  of  cash  paid  in.  The 
closed  accounts  make  a  full  and  complete  record  of  how,  when  and  by  whom 
the  authorized  capital  was  subscribed  and  paid  up. 

The  "Paid-up  Capital"  is  placed  in  the  charge  of  the  treasurer  and  we 
open  our  "Books  of  Account"  by  recording  that  fact : 

J.    Jones,    treasurer $100,000  00 

Paid-up  Capital  amt.  cash  capital $100,000  00 

All  future  entries  are  records  of  actual  transactions. 

The  subscribers  having  paid  their  subscriptions  are  entitled  to  stock 
certificates  in  the  usual  form,  which  are  transferable  by  assignment  and 
delivery.  It  is  unnecessary  to  waste  space  in  describing  these  certificates  or 
their  stubs.  Lithographed  or  printed  forms  are  on  sale  by  all  stationers  and 
any  one  of  ordinary  intelligence  can  hardly  make  a  mistake  in  filling  the 
blanks.     The  records  must  show  original  issues  and  subsequent  transfers. 

10 


Upon  the  surrender  of  the  receipts  (if  any),  given  by  the  treasurer,  when 
the  cash  was  paid,  certificates  are  issued,  signed  by  the  president  and 
secretary,  and  we  enter  on  the  stock  day  book : 

Sunds  to  Stock  Certificates $100,000  00 

B.  Brown,  Certificate  No.  1 $40,000  00 

J.  Jones,  Certificate  No.  2 30,000  00 

S.  Smith,  Certificate  No.  3 30,000  00 

Should  Brown  sell  100  shares  of  his  stock  to  R.  Robinson,  certificate 
No.  1  would  be  returned  to  the  company  and  cancelled,  new  certificates  being 
issued,  showing  the  new  ownership  and  recorded  thus : 

Stock  Certificates    $40,000  00 

B.   Brown   $40,00000 

(Certificate  No.  1  cancelled.) 

Sunds  to  Stock  Certificate $40,000  00 

R.  Robinson,  Cert.  No.  4  (For  part  of  No.  1 

cancelled)  $10,000  00 

B.  Brown,  Cert.  No.  5  (For  part    of    No.    1 

cancelled)  30,000  00 

In  the  case  under  consideration,  it  is  sometimes  thought  best  to  have  the 
record  of  organization,  subscription  and  payment  of  capital  stock  kept  on 
the  "Books  of  Account"  and  only  use  the  stock  book  to  record  the  issue  and 
transfer  of  stock  certificates.  We  would  then  open  our  book  of  account  as 
follows : 

Sunds  to  Capital  Stock $100,000  00 

B.  Brown,  yr.  sub..  400  shares 'at  $100 $40,000  00 

S.  Smith,  yr.  sub.  300  shares  at  $100 30,000  00 

J.  Jones,  yr.  sub.  300  shares  at  $100 30,000  00 

And  when  these  accounts  were  paid : 

J.  Jones,  treasurer,  to $100,000  00 

B.  Brown,  stock  sub.  paid  in  full $40,000  00 

S.  Smith,  stock  sub.  paid  in  full 30,000  00 

J.  Jones,  stock  sub.  paid  in  full 30,00000 

A  trial  balance  will  now  show  exactly  the  same  facts  as  the  combined 
trial  balance  of  the  "Stock  Ledger"  and  "Account  Ledger"  under  the  plan 
first  suggested,  viz. :  Capital  stock  credited  with  amount  of  authorized  and 
subscribed  capital  and  treasurer  debited  with  same  amount,  all  other  accounts 
being  balanced,  and  our  record  of  stock  subscription  and  their  payment  is 
complete.  In  this  particular  case  this  is  perhaps  the  better  method.  It  is, 
however,  for  reasons  which  will  be  hereafter  apparent,  only  available  when 
the  capital  stock  is  all  subscribed  and  all  paid.  Should  this  plan  be  adopted 
the  issue  and  transfer  of  stock  certificates  may  be  entered  on  an  ordinary 
stock  day  book  and  ledger  in  regular  double  entry  form  as  before  suggested 
or  a  "stock  register,"  such  as  is  sold  by  stationers,  may  be  used.  This  regis- 
ter is  ruled  about  as  the  following  example  in  which  the  issues  and  transfers 
before  illustrated,  are  filled  in. 

A  column  headed  remarks  might  be  added,  in  which  are  noted  to  whom 
certificates  are  transferred  and  what  certificates  are  issued  in  place  of  certifi- 
cates surrendered.  There  are  some  objections  to  this  form  and  I  prefer  the 
regular  double  entry  form  before  described. 

All  this  is  very  simple  and  is  the  obvious  method  of  proceeding  when 
the  capital  is  all  paid  in  cash.  But  some  one  is  sure  to  ask :  "Suppose  some 
or  all  of  these  subscriptions  are  paid  by  transfer  of  property,  accounts  or 
notes?"  This  does  not  alter  the  fact  that  the  subscriptions  are  made  and 
paid,  and  only  changes  the  form  in  which  they  are  paid  and  therefore  the 

11 


form  of  entry  when  they  are  paid.  If  they  are  paid  in  notes  we  would  charge 
bills  receivable  instead  of  treasurer;  if  in  property,  charge  real  estate, 
merchandise,  machinery  or  whatever  account  may  be  selected  to  represent 
the  particular  property  acquired  by  the  company  ;  in  each  case  crediting,  as  a 
matter  of  course,  the  individual  or  firm  from  whom  the  property,  note  or 
account  receivable  was  received.  If  the  company  assumes  liabilities  they 
are  of  course  debited  to  the  person  or  firm  previously  liable  and  credited  to 
the  account  selected  to  represent  the  particular  form  of  liability  assumed. 

The  transaction  and  the  form  of  the  entry  is  exactly  the  same  whether 
property  is  bought  by  the  company  from  one  of  its  stockholders  or  from  a 
stranger  to  the  organization.  The  "company"  is  an  entity  or  individual;  it 
deals  with  all  other  individuals  or  firms  as  an  individual  and  without  refer- 
ence to  whether  those  individuals  or  firms  do  or  do  not  have  among  their 
assets  some  of  its  stock  or  shares. 

Many  old  business  men  and  capitalists  insist  that  the  capital  of  all  com- 
panies in  which  they  are  interested,  shall  be  paid  in  cash  or  bank  checks,  and 
all  property  bought  or  acquired  by  the  company  shall  be  paid  for  with  the 
check  of  its  treasurer.  In  my  judgment  this  is  the  only  correct  course.  It 
makes  the  record  clear,  and  the  facts  that  subscriptions  have  been  paid  by 
the  subscribers  and  the  property  in  its  possession  paid  for  by  the  company 
stand  out  so  plainly  that  they  are  practically  unassailable. 

Nor  does  this  involve  the  use  of  actual  "cash."  If  the  subscriber  gives 
a  check  on  his  own  bank  to  the  treasurer  for  the  amount  of  his  subscription, 
and  the  treasurer  gives  a  check  on  the  company's  bank  in  payment  for  the 
property  acquired  by  the  company;  then  if  the  checks  are  of  equal  amounts 
and  each  deposits  the  check  received  in  his  own  bank,  both  checks  are  good 
and  each  party  has  a  cancelled  bank  check  as  a  voucher  if  the  transaction  is 
ever  questioned. 

We  are  well  aware  that  many  book-keepers,  even  some  who  call  them- 
selves accountants,  object  to  what  they  call  the  "extra  work"  and  endeavor 
to  make  modern  books  of  account  a  sort  of  "clearing  house,"  in  which  only 
balances  of  indebtedness  are  entered.  But  stationery  and  book-keepers  are 
both  low-priced  commodities  and  the  clearing  house  method,  as  a  rule,  makes 
more,  instead  of  less  work  in  the  end. 

The  corporation  accountant,  as  such,  has  nothing  to  do  with  closing 
the  books  of  the  parties  from  whom  his  company  purchases  property,  but  if 
it  should  happen  that  the  reader  keeps  both  sets  of  books  he  will  easily  close 
the  old  books  if  he  sees  the  facts  as  they  are,  and  recognizes  that  firms  are 
not  and  cannot  be  changed  into  corporations.  Corporations  are  created  and 
purchase  property.  The  transaction  is  a  sale  at  agreed  figures,  and  is  entered 
just  like  any  other  sale.  It  makes  no  whit  of  difference  in  the  form  of  the 
entry  in  either  old  or  new  books  whether  the  members  of  the  old  firm  do  or 
do  not  own  stock  in  the  newly  created  corporation  or  whether  the  interest'? 
of  the  old  partners  are  the  same  in  both  concerns.  The  two  concerns  are 
legally  and  in  fact  separate  and  distinct  entities.  It  is  of  no  interest  to  the 
seller  how  the  buyer  enters  the  transaction  if  only  he  receive  credit  or  is  paid 
for  the  property  sold  ;  nor  to  the  buyer  how,  ai  what  value  or  in  what  name, 
the  seller  carried  the  property  on  his  books,  so  long  as  he  conveys  a  perfect 
title  to  the  property  and  gives  a  receipt  for  the  consideration  agreed  to  be 
paid. 

12 


K.VAMIM.E    NO.    2. 

Capital  all  subscribed  but  to  be  paid  in  at  future  dates  already  fixed  or 
to  be  fixed  by  the  directors. 

If  the  dates  are  fixed  in  the  original  agreement,  the  case  may  be  treated 
substantially  as  in  Eample  I,  but  the  charge  to  the  individual  subscribers 
must  show  the  date  on  which  the  respective  installments  are  payable.  If  the 
capital  is  subject  to  "call"  by  the  directors,  I  deem  it  much  better  to  use  a 
stock  day  book  and  ledger.  A  typical  case  would  be  authorized  capital  and 
subscriptions  as  before,  10  per  cent  payable  at  organization,  balance  subject 
to  "call."    The  opening  entries  are : 

Subscription    $100,000  00 

Capital  stock  for  sub.  as  follows $100,000  00 

B.  Brown,  400  shares  at  $100 40,000  00 

S.  Smith,  300  shares  at  $100 30,000  00 

J.  Jones,  300  shares  at  $100 30,000  00 

Sundries  to  Subscription $10,000  00 

B.  Brown,  10  per  cent  on  400  shares 4,000  00 

S.  Smith,  10  per  cent  on  300  shares 3,000  00 

J   Jones,  10  per  cent  on  300  shares 3,000  00 

Note  that  the  subscription  creates  a  present  liability  of  the  individual 
subscriber  for  only  10  per  cent  of  his  subscription.  The  remaining  90  per 
cent  is  in  the  nature  of  a  contingent  liability.  It  may  be  converted  into  an 
actual  present  liability,  in  whole  or  in  part,  by  the  future  action  of  the  board 
of  directors  or  of  a  receiver,  should  the  company  be  unfortunate  enough  to 
be  thrown  into  a  receivership.  We  therefore  leave  the  uncalled  part  of  the 
subscription  in  the  "subscription  account"  and  charge  the  individual  sub- 
scribers with  the  10  per  cent  which  is  presently  payable. 

When  these  accounts  are  paid  we  enter  as  before : 

Paid  up  capital  to  Sundries $10,000  00 

B.  Brown,  10  per  cent  on  400  shares $  4,000  00 

S.  Smith,  10  per  cent  on  300  shares 3,000  00 

J.  Jones,  10  per  cent  on  300  shares 3>°oo  00 

Should  the  directors  order  a  call  for  a  portion  of  the  unpaid  subscrip- 
tions payable  at  a  named  date  in  the  future,  say  20  per  cent  payable  April  1st, 
we  would  enter  on  our  stock  day  book  : 

Sundries  to  Subscription $20,000  00 

B.  Brown,  first  call  20  per  cent  on  400  shares, 

due  April  1 $  8,000  00 

S.  Smith,  first  call  20  per  cent  on  300  shares, 

due  April  1 6,000  00 

J.  Jones,  first  call  20  per  cent  on  300  shares, 

due   April    1 6,000  00 

And  as  payments  were  made  credit  the  individual  and  charge  paid-up 
capital  with  amount  of  payments. 

A  trial  balance  of  our  stock  ledger  will  then  show  : 

Capital  Stock  $100,000  00 

Subscription    $  70,000  00 

Paid-up   capital    30,000  00 

The  stock  day  book  and  the  closed  accounts  on  the  stock  ledger  will 
show  just  when  the  "calls"  were  made  and  paid.  Should  any  of  the  sub- 
scribers fail  to  pay  the  "calls"  or  assessments  when  the  same  are  due,  the 
unpaid  amount  will  stand  to  the  debit  of  his  account  on  the  stock  ledger  and 
Paid-up  Capital  account  show  that  much  less  debit.     The  company  can,  in 

13 


that  case,  either  sue  the  delinquent  for  the  amount  as  a  debt  past  due  and  for 
which  it  has  a  lien  on  his  stock,  take  the  course  prescribed  by  the  statutes  of 
the  state  in  which  the  company  is  organized  and  the  by-laws  of  the  company 
itself  for  forfeiting  and  selling  the  shares  of  stock  on  which  default  has  been 
made,  or  it  can  let  it  stand  as  a  debit  account  on  its  stock  ledger. 

Since  the  shares  of  stock  are  not  fully  paid  no  certificates  of  stock  can 
be  issued.  In  place  thereof  the  treasurer  gives  receipts,  stating  that  the  pay- 
ment is,  first  10  per  cent,  first  call  of  20  per  cent  as  the  case  may  be. 

It  is  a  familiar  principal  of  law  that  a  debtor  cannot  transfer  his  liability 
without  the  consent  of  the  creditor.  It  follows  that  a  subscriber  for  stock 
cannot  assign  or  sell  that  stock  so  as  to  relieve  himself  of  responsibility  for 
the  unpaid  part  of  his  subscription  without  the  consent  of  the  company. 
Therefore  all  assignments  or  transfers  of  partly  paid  stock  are  made  upon 


STOCK  REGISTER. 

Number 

Name. 

Issued. 

No.  of  Shares 

Par  Value. 

Surrendered. 

Jan.  1,  1897 

■'     l!      " 

Apr.  1,      " 

"     1,      " 

400 
300 
300 
100 
300 

40000  00 
:i(KHX)  00 
30000  00 
10000  00 
30000  00 

Apr.  1,  1897 

2 

3 

4 

5 

a  book  kept  for  that  purpose  in  the  office  of  the  company.  It  may  be  an 
ordinary  record  book  or  a  book  of  printed  forms.  The  original  subscriber, 
or  present  owner  signs  an  assignment  and  transfer  naming  the  assignee  and 
the  number  of  shares ;  the  purchaser  signs  an  acceptance  of  the  stock  and  an 
agreement  to  pay  all  unpaid  portions  of  the  original  subscriptions  when 
legally  "called" ;  and  the  company  by  its  president  and  secretary  signs  a 
formal  consent  to  the  transfer.  We  enter  such  an  assignment  on  our  stock 
day  book. 

Subscription    $ - 

B.  Brown,  unpaid  subscription  for  shares  of 

stock  assigned  to  Robinson $ 

See  transfer  book  folio 

We  also  make  a  foot  note  on  the  original  subscription  paper  (with  star 
or  other  reference  opposite  the  original  signature)  reciting  same  facts  and 
referring  to  folio  of  transfer  book  where  assignment  is  made. 

"What  responsibility  or  liability  would  attach  to  the  officer  or  director 
assenting  to  the  transfer  of  partly  paid  stock  from  a  responsible  original 
subscriber  to  an  irresponsible  assignee?"  is  an  interesting  legal  question.  It 
is,  however,  for  the  consideration  of  the  persons  damnified  and  the  consent- 
ing  officer,  not  the  accountant. 

If  tin-  company  or  its  directors  are  not  satisfied  with  the  responsibility 
of  the  assignee  they  may  refuse  consent  to  the  transfer  and  thus  retain  the 
company's  claim  against  the  original  subscriber.  Whether  the  original  sub- 
scriber can  transfer  his  interest  in  partly  paid  stock  so  as  to  resign  his  rights 
without  divesting  himself  of  his  liability  for  future  calls  is  another  fine  legal 
point  which  might  he  decided  either  way  by  the  courts  of  the  several  states. 
Our  interesl  as  accountants,  is  how  to  record  such  an  assignment,  for  if 
made  or  attempted  to  be  made,  we  must  enter  it  on  our  books.  The  situation 
is  not  very  likely  to  arise,  but  is  certainly  among  the  possibilities.     If  I  were 

14 


secretary  of  a  corporation  and  was  notified  of  a  transfer  of  partly  paid  stock 
to  which  the  company  refused  consent,  I  would  merely  "note"  the  fact  on 
the  original  subscription  and  on  Subscription  Account  on  my  Stock  ledger. 
Then  if  a  dividend  were  declared  or  other  proceedings  taken  which  involved 
the  ownership  in  the  rights  and  benefits  accruing  to  that  stock  I  should  refuse 
to  pay  that  dividend  or  take  any  other  action  in  the  matter  until  the  question 
of  ownership  had  been  decided  by  the  courts.  Should  the  directors  (or 
officers  having  authority)  order  any  different  course  I  would  obey  orders, 
but  should  make  the  books  and  records  show  clearly  not  only  what  had  been 
done,  but  that  it  had  been  done  "by  order." 

The  books  of  account  in  the  case  under  consideration  are  opened  exactly 
as  Example  i,  when  Stock  ledger  is  used,  i.  e.,  treasurer  is  charged  with  all 
money  received  on  account  of  capital  stock  and  Paid-up  Capital  credited. 

The  remarks  as  to  payment  of  stock  subscription  by  transfer  of  property 
or  things  other  than  cash,  in  discussing  Example  I  apply  with  still  more 
force  to  Example  No.  2.  Because  it  is  of  even  greater  importance  to  make 
the  records  show  clearly  exactly  when  and  how  payments  are  made  on  sub- 
scriptions and  how  much  is  still  "subject  to  call"  and  who  is  responsible  or 
liable  when  such  "calls"  are  made.  The  uncalled  and  unpaid  subscriptions 
are  considered  by  the  banks  and  other  creditors  as  an  addition  to  the  respon- 
sibility of  the  company  over  and  above  its  actual  present  assets.  They 
operate  as  an  endorsement  or  guaranty  by  each  subscriber  to  the  amount  of 
his  unpaid  subscription,  of  the  indebtedness  of  the  company. 

4.  A  .1  A 

CHAPTER  V. 

A.   & 

Illustrations  of  Opening  Entries. 
-1  A. 

ANOTHER  METHOD. 

SO  MANY  book-keepers  of  experience  and  skill  in  partnership  accounting 
find  themselves  utterly  at  sea  when  confronted  with  the  task  of  opening 

the  books  of  a  private  corporation  that  a  word  in  that  connection  may 
prove  of  use  to  some  readers.  All  the  ordinary  books  of  account  being  the 
same  in  corporations  as  in  partnerships,  it  is  only  necessary  here  to  treat  of 
those  recording  the  transactions  in  capital  stock,  and  it  is  presumed  that  a 
few  simple  suggestions  will  suffice. 

The  capital  stock  of  a  corporation  is  fixed  in  some  instances  by  the  char- 
ter which  gives  it  existence,  in  others  by  the  corporate  officers.  In  either 
case,  after  the  amount  is  once  fixed,  it  can  not  be  changed  without  authority 
of  the  state.  It  therefore  follows  that  the  "Capital  Stock"  account  in  the 
ledger,  as  representing  such  fixed  amount,  should  itself  stand  unchanged 
either  during  the  entire  existence  of  the  company,  or  until  an  amended 
charter  authorizes  its  increase  or  decrease. 

The  book-keeper  must  inform  himself  first  as  to  the  amount  of  the 
authorized  capital  stock,  which  information  he  can  obtain  from  the  record 
(or  minute)  book,  which  should  always  contain  a  copy  of  the  charter  and  the 

15 


resolution  under  which  it  was  accepted  as  such  by  the  corporation. 

We  will  suppose  that,  either  by  charter  or  resolution,  the  capital 
stock  of  the  "Wilkins  Manufacturing  Company"  has  been  fixed  at  $100,000, 
to  be  issued  in  shares  of  $100  each.  By  such  charter,  or  resolution,  a  latent 
value  has  been  created,  which,  until  disposed  of,  remains  in  the  treasury  of 
the  company.    These  facts  are  rec<  irded  by  the  first  journal  entry,  as  f<  »llows  : 

Treasury  Stock   $ioo,oco  oo 

To  Capital  Stock $100,000  00 

with  suitable  reference  to  authority.  The  writer  does  not  propose,  here 
and  now,  to  discuss  the  objections  which  some  accountants  urge  against  this 
form  of  opening,  but  confines  himself  to  the  statement  that  in  many  years 
of  experience,  with  numerous  corporations,  he  has  found  it  the  simplest  and 
best. 

It  is  usual,  immediately  upon  organization,  to  determine  by  resolution 
how  the  stock  shall  be  disposed  of.  If  subscriptions  thereto  are  to  be  taken, 
the  incorporators  may  decide  whether  such  subscriptions  are  to  be  paid  at 
one  time,  or  in  installments,  and  upon  what  terms ;  or  they  may  depute  that 
power  to  the  next  board  of  directors.  We  will  presume  that  in  this  instance 
it  is  decided  that  25  per  cent  shall  be  paid  November  1,  1897,  25  per  cent  in 
two  months  from  that  date,  25  per  cent  four  months  later,  and  the  remainder 
when  called  for  by  the  board  of  directors ;  and  that  business  may  be  com- 
menced when  not  less  than  $60,000  shall  have  been  subscribed. 

A  subscription  list  is  then  opened  in  form  as  follows,  and  we  will  sup- 
pose signatures,  etc.,  to  be  secured  as  thereon  entered : 


Date 

Name  and  Addl  i  !  s 

No.  of  Shares 

Amount 

1897 
Oct.    25 

••     25 

..          ._,,; 

"     26 
"     29 
"     29 
"     29 

300 
100 
120 
115 
10 

Ml 
5 

BOOOO  (X) 

10000  00 

(  larksville. 

12000  no 

115 <» 

Nashville,      "     

1000  mi 

C.  Flisher 

lames  ("larks 

5000  mi 
500  00 

SUBSCRIPTION   LIST. 

We,  the  undersigned,  severally  subscribe  to  the  capital  stock  of  the 
Wilkins  Manufacturing  Company  in  the  amounts  and  for  the  number  of 
shares  set  opposite  our  respective  names,  and  agree  to  pay  for  the  same  as 
follows:  Twenty-five  per  cent  November  1,  1897;  25  per  cent  January  1. 
1898;  25  per  cent  May  1,  1898;  and  the  remainder  when  called  for  by  the 
board  of  directors. 

It  is  resolved  now  to  commence  operations,  as  we  have  $70,000  sub- 
scribed. The  list,  being  of  the  utmost  importance,  is  carefully  preserved 
and  the  next  journal  entry  follows: 

Stock   Subscriptions  • 

'1\.  Treasury   Stock 0  00 

with  a  list  of  subscribers  and  amounts.  By  this  process  we  have  disposed  of 
$70,000  of  the  Stock  :  $30,000  remains  in  the  treasury  for  future  disposition. 
and  the  capital  stock  remains  properly  al  $too,i 

It  is  advisable  to  keep  a  small  subsidiary  ledger  with  the  subscribers, 
credit  Stock  Subscription  accounl  in  the  general  ledger,  with  all  payments 
thereon,  and  credit  the  individuals  in  said  subsidiary  ledger.     Almost  any 


in 


small  book  with  money  columns  can  be  used  for  this  purpose,  or  some  of  the 
pages  at  the  end  of  the  general  ledger  may  be  reserved  for  the  individual 
subscribers  accounts.  If  the  latter  plan  is  adopted,  which  we  do  not  advise, 
care  must  be  taken  to  omit  these  accounts  when  taking  off  a  trial  balance. 
The  aggregate  of  all  the  balances  in  such  subsidiary  ledger  (or  in  such 
reserved  part  of  the  general  ledger)  must  always  be  the  same  as  the  balance 
of  the  Stock  Subscription  account. 

If  all  the  stock  had  been  subscribed  for  there  would  be  no  occasion  at 
present  to  open  a  Treasury  Stock  account,  as  Stock  Subscription  account 
would  serve  the  purpose,  with  less  book-keeping. 

As  each  share  carries  with  it  one  vote  at  the  stockholders'  meetings,  it  is 
necessary  to  have  a  record  showing  the  voting  power — number  of  shares — 
of  each  stockholder.  The  laws  also  require  that  such  list  be  kept.  For  this 
purpose  the  following  form  of  shareholders'  ledger  is  the  simplest  and  best 
known  to  the  writer.  In  it  all  unnecessary  matter  is  omitted.  Shares  are 
entered,  but  not  money,  so  that  the  balance  shows  always  the  number  of 
shares  or  votes ;  and,  having  that  information,  anyone  can  at  once  tell  the 
amount  in  dollars  if  it  should  become  necessary. 

At  stockholders'  meeting,  where  the  representation  has  frequently  to  be 
accurately  ascertained  and  reported  in  very  short  time,  this  simple  form  will 
be  found  invaluable. 

The  transfer  journal  leading  thereto  is  so  simple  and  so  plainly  sug- 


Stockholder's  N 

No.  of 
Transfer 

Shares 

CERTIFICATES 

Balance 
of  Shares 

Acqird 

Trans 

Issued 

Surrendered 

Held 

gested  by  the  form  of  ledger  that  description  is  unnecessary,  further  than  to 
say  all  transfers  are  entered  on  the  transfer  journal  in  numerical  order,  as 
they  occur. 

&     ^     &*     $* 

CHAPTER  VI. 


Capital  Stock  and  Capital, 
i.  X 

THE  difficulty  which  looms  up  quite  formidably  before  a  book-keeper 
when  he  first  undertakes  to  make  entries  relating  to  capital  stock  is 
largely  due  to  the  treating  of  the  expressions  "capital  stock"  and 
"capital"  as  synonymous  terms,  whereas,  strictly  speaking  they  are  not  so, 
and  I  have  therefore  thought  it  expedient  to  attempt  to  draw  a  clear  distinc- 
tion between  the  two. 

Let  me  state  at  the  outset  that  a  corporation  having  a  capital  stock  is 
called  a  "stock  corporation"  and  that  its  component  parts  are  called  stock- 


17 


holders  ;  and  that  a  corporation  having  no  capital  stock  is  called  a  "non-stock 
corporate  >n."  and  that  its  component  parts  are  called  members.  It  is  evident, 
therefore,  thai  a  corporation  may  exist  without  having  a  capital  stock. 

The  capital  stock  of  a  corporation  is  the  amount,  in  money  or  property, 
subscribed  and  paid  in.  or  secured  to  be  paid  in,  by  the  stockholders.  The 
amount  of  capital  stock,  the  number  of  shares  into  which  it  is  divided,  and 
the  par  value  of  each  share  are  determined  upon  by  the  original  subscribers, 
and  embodied  in  the  articles  of  association,  and  the  amount  of  the  capital 
stock  so  fixed  remains  invariably  the  same,  unless  changed  by  the  stock- 
holders in  pursuance  of  legislative  authority.  The  directors  who  are  to 
manage  the  affairs  of  the  corporation  for  the  first  year,  or  until  their 
successors  are  elected,  are  named  concurrently  with  the  fixing  of  the  amount 
of  the  capital  stock,  and  it  follows  that  they  could  not  have  had  any  voice  in 
the  fixing  of  the  amount  of  the  capital  stock,  nor  can  they  subsequently,  by 
resolution  or  otherwise,  increase  or  diminish  or  in  any  wise  vary  the  amount 
of  the  capital  stock  as  set  out  in  the  articles  of  the  association  whereby  the 
corporation  was  created.  The  powers  of  the  corporation  being  in  the  board 
of  directors,  it  can,  however,  take  the  initiative  and  call  the  stockholders 
together  for  the  purpose  of  deciding  whether  or  not  the  stockholders  deem 
it  desirable  to  have  a  change  made  in  their  original  holdings  in  the  corpora- 
tion ;  the  law  in  such  case  made  and  provided,  must  be  closely  followed,  and 
if  any  change  is  made  in  the  capital  stock,  notice  to  the  world  must  be  given 
by  the  filing,  in  the  offices  where  the  original  articles  of  association  were 
filed,  of  a  certificate  of  such  change.  The  capital  stock  of  a  corporation  is 
considered  as  a  substitute  for  the  personal  liability  of  the  individual  members 
of  a  private  co-partnership,  and  the  law  implies  a  promise  on  the  part  of  the 
subscriber  to  pay  its  par  value  when  called  for. 

Capital  stock  therefore  differs  from  capital  in  these  particulars  : 

( i )  That  it  remains  invariably  the  same  as  fixed  by  the  articles  of 
association,  unless  changed  by  legislative  authority;  and  (2)  That  the  term 
capital  stock  is  never  properly  used  to  indicate  the  value  of  the  property  of 
the  corporation. 

The  capital  of  a  corporation  is  the  estate,  whether  in  money  or  prop- 
erty, or  both,  at  its  actual  value,  owned  by  the  corporation,  and  is  subject 
to  fluctuation;  in  other  words,  it  is  the  investments  of  the  stockholders  in 
the  corporation,  together  with  the  gains  and  profits  realized  from  such  invest- 
ments; or,  if  there  have  been  losses,  then  the  capital  is  the  residue,  after 
deducting  such  losses  from  the  investments. 

The  ownership  of  the  capital  stock  is  in  the  stockholders,  but  the  owner- 
ship of  the  property  is  in  the  corporation;  and  all  of  the  stockholders  can 
sell  all  of  their  stock  to  other  persons,  but  all  of  the  stockholders,  jointly  or 
otherwise,  could  not  transfer  the  corporate  property.  The  stock  need  not 
be  sold  precisely  at  par;  it  may  be  sold  above  or  below  par,  and  is  more 
frequently  sold  below  than  above.  In  California  the  right  of  a  corporation 
to  sell  its  stock  at  a  price  less  than  par  and  to  receive  the  contract  price  in 
full  payment  is  an  established  proposition. 

Where  the  capital  stock  has  nol  been  paid  in  full,  resorl  is  had  to  a 
ments  to  provide  funds  for  the  corporation.     Two  kinds  of  assessment  are 
recognized  by  law;  one,  on  accouni  of  unpaid  subscriptions;  the  Other,   for 
the  purpose  of  raising  money  to  pay  debts.    In  California,  the  latter  kind  of 

18 


assessment  may  be  levied  notwithstanding  the  subscription  price  has  been 
actually  paid  in  full.  And  the  fact  that  certificates  of  stock  have  printed  or 
written  thereon,  "Fully  paid  and  non-assessable,"  does  not  waive  the  right 
of  the  corporation  to  make  assessments.  These  words  are  construed  to  mean 
that  no  assessment  will  be  levied  on  account  of  the  deficiency  in  the  subscrip- 
tion price;  as  otherwise,  the  courts  have  held,  a  corporation,  at  the  very 
beginning  of  its  existence,  would  be  voluntarily  depriving  itself  of  file  only 
means  of  protection  afforded  it  in  the  raising  of  money  other  than  by  loans. 
The  laws  of  many  of  the  states,  and  the  by-laws  made  in  pursuance  of1 
such  state  laws,  provide  that  each  director,  as  a  qualification  for  office,  shall 
hold  one  or  more  shares  of  the  corporation,  the  object  being  that  the  affairs 
of  a  business  corporation  shall  be  entrusted  only  to  those  having  a  pecuniary 
interest  in  its  welfare,  and  conservative  corporation  managers  are  careful 
to  see  that  each  director,  in  case  he  is  not  already  a  stockholder,  shall  have  a 
certificate  for  the  proper  number  of  shares,  issued  to  him  upon  the  very  day 
and  date  that  he  becomes  a  director.  The  directors  named  in  the  articles  of 
association  must  be  so  qualified. 

X  .1  &  x 

CHAPTER  VII. 

The  Distribution  of  Dividends. 

AT  THE  end  of  the  fiscal  year,  and  oftener  if  required,  the  net  result  of 
the  business  is  ascertained  in  the  manner  used  in  "closing  the  books" 
of  any  business.  It  is  desirable  to  take  more  than  usual  care  in  valuing 
both  the  property  and  the  accounts  receivable  of  a  corporation,  because  most 
of  the  states  make  directors  who  assent  to  dividends  which  have  not  been 
actually  earned,  personally  liable  to  the  creditors  of  the  corporation.  Assets 
of  a  corporation  which  have  been  distributed  among  stockholders  so  as  to 
leave  an  amount  insufficient  to  pay  liabilities  may  be  pursued  into  the  hands 
of  the  holders  by  creditors  of  the  corporation.  Some  corporations  set  aside 
from  the  apparent  profits  of  the  current  year  a  sinking  fund  to  provide  for 
accounts  receivable,  which  may  afterwards  prove  to  be  uncollectable  either 
in  whole  or  in  part.  When  this  has  been  done  all  accounts  discovered  to  be 
"bad"  during  the  current  year  (but  which  were  left  on  the  books  by  the  last 
preceding  "balance  sheet"  as  good  or  even  doubtful)  are  charged  to  the 
sinking  fund.  By  this  means  each  year's  business  is  made  to  take  care  of  its 
own  bad  debts  only.  All  these  details  are  strictly  within  the  province  of  the 
board  of  directors,  who  are  legally  responsible  for  the  management  and  the 
accountant  only  carries  out  its  orders,  and  only  makes  entries  of  this  kind  by 
its  direction.  A  balance  sheet  showing  the  gains  and  losses  of  the  year's 
business  and  the  net  result  of  the  same,  also  such  trade  statements  as  are 
required,  giving  the  fullest  possible  information  of  the  sources  and  causes 
of  those  gains  and  losses,  should  be  prepared  by  the  book-keeper  and  sub- 
mitted to  the  board  of  directors.  The  board  by  formal  resolution  makes  such 
disposition  of  the  net  gains  as  it  thinks  best.  The  usual  course,  after  first 
providing  for  doubtful  assets  and  such  other  sinking  funds  as  the  case 

19 


requires,  is  to  direct  the  balance  of  the  gains  to  be  carried  to  "surplus"  or 
"rest."  This  account,  by  whatever  name  it  is  called,  represents  the  undi- 
vided earnings  of  the  "paid  up  capital."  These  earnings  are  distributed 
among  the  stockholders  by  the  directors  at  such  time  and  in  such  amounts  as 
the  directors,  by  resolution,  order. 

This  order  of  distribution  is  called  "declaring  a  dividend,"  and  is  gen- 
erally in  the  discretion  of  the  board  of  directors.  The  accumulation  of  a 
"surplus"  fund  is  usually  thought  good  business  policy,  and  for  certain 
elasses  of  corporations  is  required  by  law.  There  are  many  very  successful 
corporations  whose  "surplus  fund"  largely  exceeds  their  "capital  stock." 
Dividends  must  be  equal  upon  all  shares  of  stock  of  the  same  class  and  with- 
out preference.  If  the  corporation  has  issued  preferred  stock,  those  shares 
constitute  a  class  by  themselves  and  are  by  the  terms  of  the  preference 
entitled  as  a  class  to  dividends  in  preference  to  shares  of  common  stock. 
But  as  between  holders  of  stock  of  the  same  class  there  must  be  no  discrim- 
ination and  funds  set  aside  for  dividends  upon  any  class  of  stock  must  be 
evenly  divided  among  the  holders  of  that  class  of  stock  according  to  the 
number  of  such  shares  each  holds.  Dividends  are  either  a  named  sum  per 
share  or  a  named  percentage  on  the  "paid  up  capital."  When  the  board  of 
directors  have  declared  a  dividend,  whether  payable  at  once  or  at  a  future 
date,  the  book-keeper  transfers  the  amount  required  to  pay  it  from  "surplus" 
to  "dividend"  account  by  an  entry  as  follows: 


Surplus  $ 

Dividend  account,  $ 

For  div.  No $  per  share. 

Dividends  when  declared  or  ordered  become  at  once  a  debt  due  from  the 
corporation  to  the  ten  owners  of  stock  without  reference  to  the  ownership 
at  the  time  the  profits  were  actually  earned  or  at  the  time  the  dividends  were 
payable,  if  payment  is  deferred.  The  corporation  is  protected  in  paying 
dividends  to  stockholders  of  record  on  the  day  dividends  are  declared,  with- 
out requiring  production  of  the  certificate  of  stock,  but  it  is  probable  that  a 
purchaser  after  the  transfer  books  were  closed  and  before  dividend  was 
declared,  would  be  entitled  to  collect  a  dividend  in  the  absence  of  any  agree- 
ment that  the  sale  was  "ex-dividend,"  provided  he  notified  the  corporation  of 
his  purchase  before  the  dividend  was  actually  paid  to  the  stockholder  of 
record. 

Dividends  are  usually  paid  by  special  dividend  checks  or  orders  on  the 
treasurer,  payable  to  the  order  of  the  stockholder  of  record.  They  may, 
however,  be  passed  to  the  credit  of  the  individual  stockholders  or  paid  in  any 
other  convenient  manner.  In  any  case  the  amount  paid  is  charged  to  "divi- 
dend account"  and  credited  to  the  source  of  payment.  Should  there  be  more 
than  one  elass  of  stock,  that  fact  is  recognized  in  the  resolution  declaring  the 
dividend  by  stating  the  amount  to  be  paid  on  each  class,  and  the  book-keeper 
must  have  as  many  "dividend"  accounts  as  these  classes  of  stock  upon  which 
dividends  are  declared,  distinguishing  them  by  appropriate  names. 

Since  the  method  of  distributing  <  >r  disposing  of  profits  is  the  only  prac- 
tical difference  between  the  books  of  account  of  a  corporation  and  those  of 
a  natural  person  engaged  in  the  same  business  any  further  discussion  of  such 
books  seems  superfluous. 

20 


CHAPTER   VIII. 
The  Sectionalization  of  Ledgers. 

IT  IS  now  very  generally  understood  in  the  larger  business  corporations  oi 
the  United  States  that  it  is  advantageous  to  sectionalize  the  various 
accounts  carried  as  much  as  possible.     It  is  not,  however,  so  generally 
understood  in  the  smaller  business  houses,  and  it  is  for  that  reason  we  desire 
to  call  our  readers  attention  to  this  very  useful  method. 

Let  us  take,  for  instance,  a  business  in  which  a  number  of  traveling 
salesmen  are  employed,  each  having  certain  territory.  In  this  case  the  sales 
ledgers  should  be  subdivided,  so  many  pages  being  allotted  to  the  customers 
of  each  salesman.  Separate  columns  should  be  provided  in  sales  book,  cash 
book  and  cross-entry  journal  for  each  section,  and  a  representative,  or 
adjustment  account  opened  with  each  section  in  the  general  ledger  to  which 
the  totals  of  columns  in  sales  book,  cross  entry  journal,  and  cash  book  are 
posted  at  the  close  of  each  month.  If  practicable,  it  will  be  found  more 
convenient  to  provide  a  separate  ledger  for  the  section  covered  by  each 
traveler,  and  the  loose  leaf  system  is  admirably  adapted  for  this  purpose,  as 
it  can  be  made  just  the  size  to  suit  the  number  of  accounts  to  be  carried,  and 
enlarged  and  diminished  at  will. 

The  form  of  ledger  we  recommend  (where  exceptional  circumstances 
do  not  alter  cases)  would  contain  the  following  columns: 

Date.         Items.         Fol.         D'bts.         Mo.        D'bts.        D'bt.        Bal. 
Date.         Items.         Fol.         C'dts.         Mo.        Celts.        Celt.        Bal. 

The  purpose  of  the  "Monthly  Debits"  and  "Debit  Balance"  columns  will 
be  explained  a  little  later  on. 

The  representative,  or  adjustment,  accounts  in  the  general  ledger  will  at 
the  close  of  each  month  show  as  follows  : 

j.  E.  robins'  ledger  account. 

Dr. 
i9oo.  Folio.         Debits.  Mo.  Debits.        Balance. 

March  31.  7,846  19 

April  30— 

Journal 28        6,75120 

Cash    160  129  60        6,880  80 

7,631  24 
I9oo.  Folio.        Credits.         Mo.  Credits. 

April  30 — 

Cash   160        5,967  80 

Journal    28        1,12795        7,095  75 

The  credits  are  carried  underneath  the  debits  here  for  convenience  of 
printing. 

This  account,  you  will  note,  displays  the  total  business  of  J.  F.  Robins, 
salesman,  and  its  result,  and  it  can  be  made  still  more  useful  by  a  little  more 
itemizing.  Sales  can  be  kept  separate  from  cross  entries  on  the  debit  side, 
and  on  the  credit  side  returns  and  allowances  may  be  particularized.  The 
increase  of  "Monthly  Debits"  shows  an  increase  of  business,  and  the  increas- 
ing or  decreasing  "Debit  Balance"  shows  how  the  customers  are  paying  their 
accounts.  So  that  this  account  becomes  a  valuable  comparative  statement  of 
J.  F.  Robins'  business. 

21 


In  taking-  the  trial  balance  of  the  J.  F.  Robins  ledger,  draw  off  monthly 
debits,  monthly  credits  and  the  balances,  and  foot  all  three  columns.  Then, 
if  the  total  of  the  individual  balances  does  not  amount  to  $7,631.24,  you  can- 
see  at  a  glance  whether  your  total  debits  posted  are  $6,880.20,  and  your  total 
credits  $7,095.75.  That  means  that  ninety-nine  times  out  of  a  hundred  when 
there  is  an  error  it  can  be  located  to  the  side  on  which  it  occurred,  which  is  a 
tremendous  advantage. 

The  principle  above  outlined  can  be  successfully  carried  out  in  any  busi- 
ness with  manifest  benefit.  In  enterprises  of  considerable  magnitude  it  will 
frequently  be  found  convenient  to  have  separate  cash  books,  sales  books,  etc., 
as  the  use  of  columnar  books  in  such  cases  will  necessitate  books  of  an 
unwieldly  size. 

The  accounts  may  be  sectionalized  in  many  ways  as  may  be  found  most 
suitable  to  the  requirements  of  the  business.  Some  houses  sectionalize  terri- 
torially, as :  New  York  ledger,  Pennsylvania  ledger,  Ohio  ledger,  etc.,  etc. 
Some  sectionalize  alphabetically,  as  A-F  ledger,  G-K  ledger,  L-R  ledger, 
S-Z  ledger. 

A  very  frequent  sectionalization  is  by  departments,  as  Wholesale 
Ledger,  City ;  Wholesale  Ledger,  Foreign ;  Retail  Ledger,  etc.,  etc. 

Where  sales  tickets  are  used  it  will  be  found  useful  to  have  different 
colored  tickets  for  each  section. 

Where  there  are  a  number  of  sections  it  is  also  found  useful  to  carry  the 
separate  adjustment  accounts  in  the  general  ledger,  and  group  them  in  the 
private  ledger  for  the  benefit  of  the  principal,  or  officers  of  the  company, 
thus : 

Folio.  Debits.       Mo.  Debits.  Dr.  Balance. 

Mar.  31.     Balances — 

N.  Y.  ledger 9,562  75 

Pa  ledger   2,758  92 

Ohio   ledger    6,87560 

April  30.     Journal — 

N.  Y.  ledger 178       10,78590 

Pa.  ledger  178        4,560  25 

Ohio  ledger  180        8,972  60 

Cash — 

N.  Y.  ledger 235     475  35 

Pa.  ledger  235 

Ohio    ledger    235  96  50      24,890  60 

Balances — 

N.  Y.  ledger 10,940  11 

Pa.  ledger   4,44662 

Ohio  ledger  7,7i6  25 

1900.  Folio.         Ci  edits.  Mo.  Credits. 

April  30.     Cash — 

N.  Y.  ledger 234  8,765  1. 

Pa.   ledger    234  2,219  75 

Ohio  ledger  234  7,550  20 

Journal — 

N.  Y.  ledger 178  1,118  75 

Pa.    ledger    178  652  80 

Ohio  ledger  180  678  25      20,084  89 


CHAPTER   IX. 

X   4 

The  Transfer  of  Accounts  from  Partnerships  to  Corporations. 

4  a. 

MANY  book-keepers  who  are  otherwise  entirely  competent  appear  to  be 
afraid  to  take  charge  of  the  detail  pertaining  to  the  transfer  of 
accounts  from  a  partnership  to  a  corporation.    We  are  not  referring 
now  to  large  interests,  or  trusts  whose  stock  is  open  to  public  subscription. 
We  have  in  view  merely  a  small  commercial  concern,  rated  in  Dun's  at 
$100,000,  the  two  proprietors  of  which  wish  to  introduce  additional  capital 
1  in  order  to  extend  their  business. 

There  is  no  question  of  stock  ledgers,  or  subscription  ledgers,  preferred 
and  common  stock,  debentures  or  bonds,  or  anything  of  that  kind. 

As  an  example  we  will  take  the  incorporation  of  the  firm  of  Schneider  & 
Schroeder,  who  have  arranged  with  Mr.  Schuettler  that  he  should  invest 
$35,000  in  the  business,  taking  an  active  interest  with  the  position  of  vice- 
president. 

The  balance  sheet  of  Schneider  &  Schroeder  on  December  31,  1898,  was 

as  follows : 

Cash  $  1,866  50 

Bills  Receivable    10,783  12 

Accounts   Receivable    25,638  46 

Inventory    , 20,7JP  42 

Real  Estate   •  •  5,88i  93 

$64,890  43 

A.  Schneider,  investment $28,120  50 

B.  Schroeder,  investment I7JI9  33 

Bills  Payable,  investment 8,500  00 

Accounts  Payable    •   ".150  o° 

$64,890  43 

The  net  assets  of  the  partnership  were  therefore  $45,239.83.  The  new 
company  was  organized  with  a  capital  of  $75,000,  the  stock  to  be  subscribed 
as  follows:  A.  Schneider,  $25,000;  B.  Schroeder,  $15,000;^.  Schuettler, 
$35,000.  The  company  was  incorporated  under  the  name  of  "The  Schneider 
&  Schroeder  Co." 

A  new  set  of  account  books  was  purchased  for  the  new  company  and 
the  first  entry  made  was  as  follows  in  the  journal : 

Subscription  Acct $75,ooo  00 

To  Capital  Acct $75,00000 

This  entry  records  the  fact  that  the  company  was  incorporated  with  a 
certain  capital,  and  that  the  stock  is  waiting  to  be  subscribed. 

It  was  preceded  by  the  following  explanation : 

"The  Schneider  &  Schroeder  Co.     Incorporated  under  the  laws  of  the 

State  of ,  1  st  January,  1899.     Authorized  capital,  $75,000,  750 

shares,  par  value  $100  each." 

Messrs.  Schneider,  Schroeder  and  Schuettler  having  subscribed  for 
250,  150  and  350  shares  respectfully,  the  following  entries  were  made  in  the 

journal : 

B.  Schroeder,  Dr.,  150  shares  @  $100  00  each 15.000  00 

A.  Schneider,  Dr.,  250  shares  (a)  $100.00  each $25,000  00 

C.  Schuettler,  Dr.,  350  shares  @  $100  00  each 35.ooo  00 

To  subscription  account,  cr    35.000  00 


The  stock  having  all  been  subscribed  the  subscription  account  is  closed 
and  the  subscribers  arc  charged  with  the  value  of  the  stock  for  which  they 
have  subscribed. 

At  a  meeting  of  the  board  of  directors  of  the  new  company  it  was 
resolved  to  purchase  the  business  of  Schneider  &  Schroeder  at  the  par  value 
of  its  net  assets.  A  bill  of  sale  is  accordingly  drawn  and  the  following  entries 
made  in  the  journal  as  a  record  of  the  purchase: 

"To  transfer  of  the  business  of  Schneider  &  Schroeder  (consisting  of 
sundry  assets  and  liabilities  as  hereunder  shown)  by  bill  of  sals  dated  ist 
January.  1899,  duly  executed  and  acknowledged,  and  pursuant  to  a  resolu- 
tion of  the  board  of  directors  at  a  meeting  held  on  the  first  day  of  January, 
1899,  and  entered  on  the  minutes,  pages  2  and  3. 

Cash    $  1,866  50 

Bills    Receivable    10,783  12 

Accounts   Receivable 25,638  46 

Inventory 20,720  42 

Real  Estate  5,881  93 

To  Bills  Payable $  8,500  00 

Accounts  Payable   11,15060 

Schneider   &   Schroeder 45,23983 

In  the  meantime  Mr.  Schuettler  has  paid  by  check  for  his  stock,  the 
receipt  of  which  is  duly  recorded  in  the  cash  book.  It  is  not  necessary  to  pass 
checks  between  the  old  business  and  the  new,  as  the  following  journal  entries 
will  fully  answer  the  purpose  : 

Schneider  &  Schroeder $45,23983 

To  A.  Schneider,  stock  acct $25,000  00 

B.  Schroeder,  stock  acct 15,000  00 

A.  Schneider,  personal  acct 3,I2°  50 

B.  Schroeder,  personal  acct 2, 1 19  33 

To  pay  for  stock  subscribed  by  A.  Schneider  and  B.  Schroeder  in  The 
Schneider  &  Schroeder  Co.,  and  to  transfer  the  balance  of  the  credit  to 
Schneider  &  Schroeder  to  their  respective  personal  accounts  as  authorized 
this  day  by  the  said  A.  Schneider  and  B.  Schroeder. 

The  balance  sheet  of  the  new  company  will  now  show  as  follows: 

ASSETS. 

Cash    $36,866  50 

Bills  Receivable 10,783   u 

Accounts  Receivable  25,638  46 

[nventory 20,720  42 

Real  Estate 5.881  93 

$99,890  43 
LIABILITIES. 

:   il .... 

Bills  Payable  8,500  00 

Payable 11,150  60 

A.  Schneider,  personal 3.1-0  50 

I;.  Schroeder,  personal 2,11933 

$99.8o<>  43 

The  closing  of  the  books  of  the  old  company  is  a  very  simple  matter. 

First,   credit   as^ct   accounts   with   amounts   of  balances   of  such   accounts. 

$64,890.43.     I  )cbit  trade  liability  accounts  with  amounts  of  balances  of  such 

accounts,  $19, 650. 60.      Debit   Schneider  cc   Schroeder  with  the  difference 


between  the  assets  and  liabilities,  with  an  explanation  that  this  is  the  pur- 
chase price  of  the  business  transferred,  $45,239.83.  The  only  accounts  left 
on  the  old  ledger  are  the  debit  account  of  The  Schneider  &  Schroeder  Co. 
and  the  credit  accounts  of  A.  Schneider  and  15.  Schroeder,  so,  second,  close 
these  accounts  by  crediting-  The  Schneider  &  Schroeder  Co.  $45,239.83  .and 
charging  A.  Schneider  $28,120.50  and  B.  Schroeder  $17,119.33  to  stock 
certificates  received  from  The  Schneider  &  Schroeder  Co.,  $40,000  in  part 
payment  of  purchase  money  and  cash  $5,239.83  to  balance. 

3*    *«U    &*   <$* 

CHAPTER  X. 

Transfer  of  Accounts  from  Partnerships  to  Corporations — No.  2. 

A  JOINT  stock  company,  in  the  definition  of  the  Century  dictionary,  is 
declared  to  be  "an  association,  the  property  or  capital  of  which  is 
represented  by  stock  issued  in  shares  to  the  members  respectively; 
the  object  being  that  changes  in  membership  shall  depend,  not  as  in  part- 
nership, upon  the  consent  of  all  the  members,  but  upon  the  transfer  of  shares, 
which  (when  fully  paid  up)  any  member  may  make  without  the  consent  of 
the  others,  and  also  that  the  death  of  a  member  shall  not  dissolve  the  associa- 
tion, as  in  case  of  a  partnership,  his  right  being  simply  transferred  to  his 
executors  or  administrators."  Then  follows  a  further  statement  to  the  effect 
that  "in  the  absence  of  any  statute,  the  liability  of  a  joint  stock  company  and 
its  members,  and  its  means  of  enforcing  its  rights  as  to  third  parties,  are 
nevertheless  precisely  those  of  partners;  all  the  members  must  join  in  suing; 
all  are  liable  for  its  debts,  and  all  must  be  joined  when  sued." 

The  latter  portion  of  this  definition  may  be  correct  as  to  joint  stock  com- 
panies in  the  United  States.  In  Canada,  however,  and  especially  in  Ontario, 
it  is  entirely  erroneous.  With  us  a  company  is,  in  a  legal  point  of  view. 
distinct  from  the  persons  composing  it;  and  these  persons  are  not  personally 
responsible  for  the  company's  debts  or  engagements,  unless  expressly  made 
so,  and  their  property  is  affected  only  to  the  extent  of  their  interest  in  the 
company.  The  owner  of  shares  upon  which  all  has  not  been  called  in,  or  if 
called  is  still  unpaid,  is  responsible  to  the  creditors  of  the  company  for  the 
amount  of  his  stock  so  remaining  unpaid. 

In  the  case  which  has  just  passed  through  my  hands,  the  company  was 
formed  for  the  purpose  of  taking  over  the  assets  of  a  partnership.  I  use 
fictitious  names  and  amounts.  I  have  treated  the  conversion  in  a  method 
somewhat  different  from  anything  I  have  seen  stated  in  the  works  on  account- 
ing; and  to  my  mind  in  a  simpler  way.  The  letters  patent  of  the  company 
gave  an  authorized  capital  of  $200,000.  Seven  provisional  directors  were 
named  with  power  to  go  on  and  organize  and  carry  on  the  business  of  the 
company.  It  having  been  decided  as  of  advantage  to  have  a  certain  amount 
of  preferred  stock,  with  certain  privileges  attached,  the  first  operation  of  the 
directors  was  the  creation  thereof.  The  statute  provides  that  where  prefer- 
ence stock  is  created,  it  shall  be  done  by  by-law  of  the  directors,  which  shall 
then  be  unanimously  sanctioned  by  all  the  holders  of  shares — both  common 

25 


and  preferred  stock  subscribers — at  a  special  general  meeting  called  for  the 
purpose.  Or,  if  the  sanction  of  all  the  shareholders  is  obtained  in  writing  to 
the  by-law  passed  by  the  directors,  the  necessity  of  a  special  general  meeting 
is  obviated.  The  latter  course  was  with  us  the  easier,  and  was  the  one  pur- 
sued. The  preferred  stock  carries  with  it  the  privilege  of  a  fixed,  cumulative 
dividend  of  6  per  cent,  which,  in  plain  Anglo-Saxon,  means  that  dividend  of 
6  per  cent  shall  be  paid  annually  upon  the  preferred  stock  out  of  the  net 
earnings  of  the  company,  before  any  dividend  can  be  declared  upon  the  com- 
mon stock,  and  if  in  any  year  there  is  insufficient  profits  to  pay  the  6  per  cent, 
then  the  amount  required  to  make  up  the  deficiency  shall  be  a  first  charge 
upon  the  net  earnings  of  the  following  year's  business.  When  the  full  amount 
of  the  dividend  on  the  preferred  stock  has  been  provided  for  annually,  then 
any  balance  of  net  earnings  will  be  applied  toward  the  payment  of  a  dividend 
on  the  common  stock  up  to  6  per  cent.  Should  there  still  remain  any  undi- 
vided profits,  it  can  either  be  divided  pro  rata  over  both  the  preferred  and 
common  stock,  or  be  placed  to  the  credit  of  a  reserve  account  out  of  which 
future  dividends  may  be  paid.  In  the  formation  of  the  larger  corporation 
or  trusts,  those  "judicious  combinations  of  capital"  of  which  we  hear  so 
much,  provision  is  generally  made  that  before  dividends  are  paid  to  the 
common  stockholders,  a  certain  amount  shall  be  annually  paid  into  a  reserve 
account,  which  will  stand  as  a  guarantee  that  the  holders  of  preferred  stock 
will  receive  their  stated  dividends  as  regularly  as  the  years  roll  by.  This 
precaution  is  generally  taken  by  the  controlling  interest — usually  the  pre- 
ferred stockholders — who  care  very  little  for  the  poor  common  stockholders. 
In  the  case  I  am  discussing,  with  one  or  two  exceptions,  the  preferred  and 
common  stockholders  are  identical,  so  that  the  interests  of  the  one  class  are 
the  interests  of  the  other.     • 

The  opening  in  the  journal  of  the  new  company  for  the  preferred  stock 
is  as  follows : 

Sundries,  Dr.: 

Capital  stock,  preferred $40,000  00 

Thos.  Jones,  50  shares $  5»°oo  00 

David  Harum,   100  shares 10,000  00 

Richard  Carvel,  40  shares 4,000  00 

R.  L.  Stevenson,  50  shares 5.000  00 

E.  H.  Beach,  160  shares 16,000  00 

It  will  be  observed  that  no  attention  has  been  paid  to  the  fact  that  the 
authorized  preferred  capital  stock  is  $100,000.  In  the  majority  of  works  on 
accounting,  especially  American,  the  entry  would  be  something  like  this : 

Subscription  $40,000  00 

Treasury  stock  (preferred) 60,000  00 

Capital  stock   (preferred) $100,000  00 

To  my  mind  an  entry  in  the  books  showing  the  amount  of  the  authorized 
capital  is  totally  unnecessary,  besides  being  misleading  to  the  public  having 

business  with  the  company.  The  unsubscribed  or  treasury  stock,  as  it  is 
called,  has  no  value  whatever  as  an  asset  of  the  company.  It  is  not  an  asset 
in  any  sense  of  the  word.  Its  only  value  is  one  of  availability  for  subscription 
in  case  it  be  found  necessary  to  interest  an  increased  capital  in  the  business. 
Placing  an  account  with  such  a  high  sounding  title  upon  the  books  and  in 
the  annual  statements  of  a  company,  can  only  have  the  effect  of  deceiving  the 
unsophisticated  and  those  not  familiar  with  accounts,  and  serves  no  useful 

26 


purpose  whatever.  The  subscribed,  or  paid-up  capital  of  the  company  is  all 
that  the  public  wishes  to  know  anything  of,  and  no  entry  should  be  made  in 
the  books  which  would  in  the  slightest  degree  becloud  the  real  facts.  One 
authority  suggests  "that  the  charter  or  act  that  brings  into  being  the  corpora- 
tion also  creates  value,  or  a  latent  value,  in  the  shares  of  stock  authorized  by 
the  company."  The  latent  value  of  a  million  dollars  worth  of  unsubscribed 
stock  will  not  pay  one  dollar  of  the  liabilities,  unless  a  purchaser  of  that 
stock  can  be  found,  and  to  say  "that  the  principles  of  accounts  and  the  logic 
of  ethics  both  permit  the  debiting  of  treasury  stock  to  represent  unsubscribed 
stock,"  is  beating  his  Satanic  majesty  around  the  bush  in  a  manner  for  which 
I  should  not  care  to  assume  the  responsibility.  The  only  kind  of  stock  that 
can  be  truthfully  termed  "treasury  stock"  is  where  stockholders  return  a 
certain  number  of  shares  of  the  company  (which  they  have  already  paid  for 
either  in  cash  or  by  transfer  of  property)  into  its  treasury  to  be  sold  again, 
for  the  purpose  of  providing  a  working  capital. 
The  next  entry  in  the  journal  is  : 

Sundries,  Dr.: 

Capital  stock,  common $30,°°°  oo 

Thos.  Jones,  30  shares $  2,250  00 

David  Harum,  133  1-3  shares 10,000  00 

Richard  Carvel,  13  1-3  shares 1,000  00 

R.  L.  Stevenson,  26  2-3  shares 2,000  00 

Robt.  Thomson,  66  2-3  shares 5,000  00 

Adam  Hope,  30  shares 7,500  00 

Discount  upon  shares  issued 7  500  00 

In  the  case  of  the  common  stock,  it  was  decided  that  of  the  authorized 
issue,  $30,000  should  be  offered  to  the  preferred  stockholders  at  $75  per 
share,  the  nature  of  the  business  being  such  that  although  dividends  would 
be  earned,  none  will  likely  be  paid  to  the  common  stockholders  for  the  first 
two  or  three  years.  And  here  comes  in  another  of  those  anachronisms  in 
accountancy  literature.  In  a  well-known  text  book  a  discount  on  stock  is 
treated  in  such  a  way  that  the  following  would  be  the  entry : 

Subscription  $22,500  00 

Working  capital 7,50°  00 

Capital  stock,  common  (or  treasury  stock) . . .  $30,000  00 

Why  the  discount  on  shares  is  debited  to  "Working  Capital"  is  beyond 
my  apprehension.  The  author  says  that  many  book-keepers  "feel  justified 
in  debiting  Loss  and  Gain  account  instead  of  'Working  Capital,'  "  and  points 
out  that  the  company  does  not  practically,  or  otherwise,  lose  anything  by  the 
transaction,  and  therefore  that  it  is  not  properly  a  charge  to  Loss  and  Gain. 
In  this  he  is  right.  But  why  debit  Working  Capital  ?  It  is  not  an  accretion 
to  capital  or  assets  of  any  sort.  On  the  contrary,  it  really  represents  a  loss, 
to  the  extent  that  the  capital  actually  invested  must  earn  a  dividend  not  only 
for  itself  but  as  well  for  the  $7,500  of  rebate  made  on  the  stock.  It  sounds 
better,  I  presume,  and  really  this  is  the  only  excuse  or  justification  that  it 
seems  to  me  can  be  offered  for  debiting  "Working  Capital"  rather  than 
"Discount  on  Shares  Issued"  or  "Rebate  on  Shares  Account."  For  my  own 
part,  I  prefer  to  call  a  spade  a  spade.  As  a  matter  of  fact,  according  to  the 
statutes  of  Ontario  there  is  some  question  as  to  whether  stock  (except  min- 
ing companies)  can  be  sold  at  a  discount,  and  in  case  of  forced  liquidation, 
it  is  possible  that  holders  of  stock  bought  at  a  discount  might  be  successfully 

27 


placed  upon  the  list  of  contributories  in  a  winding  up  proceeding,  to  the 

extent  of  the  amount  of  discount  so  allowed. 

Capital  account  having  been  credited  with  subscriptions,  and  the  persons 
subscribing  having  been  debited,  we  now  proceed  to  a  consideration  of  the 
transfer  of  the  assets  of  the  business.  An  inventory  of  the  real  estate,  plant 
and  merchandise  having  been  taken  under  the  supervision  of  a  committee  of 
the  directors  of  the  new  company,  and  an  arrangement  arrived  at  as  to  the 
amount  of  stock  to  be  taken  by  the  respective  partners,  the  question  of  the 
liabilities  of  the  partnership  was  next  to  be  dealt  with.  Here,  too,  I  recom- 
mended a  departure  from  the  ordinary  mode  of  procedure.  Instead  of  the 
company  assuming  any  of  the  liabilities  of  the  partnership,  I  arranged  that 
the  amount  which  was  to  be  paid  for  the  assets,  less  the  stock  which  was  to  be 
taken  by  the  partners,  should  be  paid  to  a  trustee,  who  should  be  authorized 
and  empowered  to  pay  off  the  partnership  indebtedness  according  to  a  list 
to  be  furnished  him  by  the  partners.  This  proceeding  materially  simplified 
the  book-keeping  connected  with  the  transfer,  and  the  only  entry  required 
to  get  the  assets  on  the  books  of  the  company  was : 

Real  estate $10,000  00 

Plant  account  9,7°o  00 

Mdse.  account   35,720  00 

J.  H.  Brown  &  Co $55,4^0  00 

Of  the  amount  of  credit  of  J.  H.  B.  &  Co.,  $30,420  was  to  be  paid  over 
to  the  trustee,  and  this  was  accomplished  by  an  entry : 

J.  H.  Brown  &  Co $30,4-^0  00 

Henry  Jones,  trustee $30,400  00 

For  transfer  of  account  to  cover  liabilities  of  J.  H.  Brown  &  Co. 

Of  the  above  $30,420  one  creditor  agreed  to  take  preferred  stock  for  his 
account  of  $5,000,  hence  the  ensuing  two  entries : 

Geo.  Johnson  $5,000  00 

Capital  stock  (preferred) $5,000  00 

For  50  shares  of  preferred  stock. 

Henry  Jones,  trustee $5.ooo  00 

George  Johnson $5,ooo  00 

For  preferred  stock  taken  in  exchange    for    notes  held  against 
partnership. 

To  close  the  account  of  the  partnership  by  exchange  of  stock  for  the 
equity  of  the  partners  in  the  assets  of  the  partnership,  this  entry  was 
necessary : 

J    H.  Brown  &  Co $25,000  00 

J    H.  Brown $10,000  00 

E.  B.  Ward 7.500  00 

T.  Burns 7.500  00 

Capital  stock  (common) $25,000  00 

As  payments  were  received  on  account  of  stock,  cash  was  debited,  while 
payments  to  the  trustee  were  credits  to  Cash. 

The  book  debts  of  the  partnership  were  divided  by  mutual  consent 
amongst  the  partners. 

Thus,  very  simply  and  expeditiously,  was  the  conversion  of  the  partner- 
ship to  a  joint  stock  company  effected. 


Chapter  XI. 

The  Treatment  of  Discount  on  Treasury  Stock. 

THE  following  point  recently  occurred  in  practice :  A,  B,  C,  D  and  E 
formed  a  corporation  for  the  purpose  of  manufacturing  and  selling  a 
patented  article.  The  capital  stock  is  $100,000,  being  1,000  shares 
at  $100  per  share.  The  incorporators  contribute  $2,000  each  in  cash,  and  A 
receives  for  his  patent  right  nine  hundred  shares  at  par,  "full  paid  and  non- 
assessable." As  part  of  the  contract,  A  transfers  to  the  company  three  hun- 
dred shares  to  be  held  as  treasury  stock  and  to  be  sold  at  not  less  than  fifty 
dollars  per  share.  Subsequently  the  company  sells  one  hundred  shares  of 
Treasury  Stock  at  the  limited  price,  namely,  fifty  dollars  per  share.  The 
entry  "discount  on  treasury  stock"  would  be  at  variance  with  the  shares 
being  "full  paid  and  non-assessable."  It  is  also  desired  to  avoid  this  item, 
"discount  on  treasury  stock,"  appearing  in  the  balance  sheet.  The  following 
entries  are  suggested  to  meet  the  difficulty : 

Cash    $10,000  00 

Patent  right 90,000  00 

To  capital  stock $100,000  00 

Treasury  stock  • 15,000  00 

To  patent  right 15,000  00 

Cash  5,000  00 

To  treasury  stock 5,000  00 

The  resulting  balance  sheet  shows  as  follows : 

Assets: 

Patent  right $75,000  00 

Treasury  stock 10,000  00 

Cash 15,000  00 

Liabilities: 
Capital  stock $100,000  00 

The  main  point  is  that  the  treasury  stock  is  entered  and  carried  on  the 
books  at  its  proper  value  of  fifty  dollars  per  share,  instead  of  its  nominal 
value  of  one  hundred  dollars  per  share. 

&  A  &  A 

CHAPTER   XII. 

4.  & 

Sales  of  Stock  at  Discount  for  Working  Capital. 

i.  i. 

REFERRING  to  the  practice,  so  common  amongst  mining  companies,  of 
selling  shares  of  the  par  value  of  $1  at  ten  cents  or  fifteen  cents  per 
share — a  discount  of  85  or  90 per  cent,  there  can  be  no  question  but  that 
it  is  perfectly  legitimate,  although  considerable  doubt  exists  as  to  whether 
shares  in  any  other  form  of  company  can  be  disposed  of  by  the  direcors  at  a 
discount.  Or,  rather,  that  n  cases  where  such  sales  are  made,  if  the  holders  of 

29 


Such  shares  are  not  responsible  to  the  creditors  01  the  company  to  the  extent 
of  the  discount  so  allowed,  should  stress  of  circumstances  make  such  a 
recourse  necessary. 

No  question  arises  as  to  how  the  discount  on  shares  is  treated  by  the 
originators  of  a  mining  company. 

The  usual  course  is  to  value  the  mining  property  at  the  par  value  of  the 
capita]  stock,  be  it  $5,000  or  $5,000,000.  The  capital  stock  having  been 
divided  among  the  promoters  according  to  their  interests,  the  first  entry 
which  finds  its  way  into  the  books  of  the  mining  company  will  read  : 

The  Golconda  Mine $5,000,000  00 

Capital  stock $5,000,000  00 

The  above  will  be  posted  to  the  general  ledger,  while  the  stock  ledger 
will  contain  details  as  to  the  holdings  of  stock  by  the  promoters. 

Cash  being  required  now  to  develop  the  property,  the  usual  course  is  to 
make  a  return  to  the  treasury  of  a  sufficient  amount  of  stock  to  be  sold  to  the 
public  to  provide  the  necessary  working  capital. 

Let  us  suppose,  for  purposes  of  illustration,  that  $500,000  of  the  hold- 
ings of  the  promoters  is  returned  by  them  to  the  treasury.    Then  : 

Treasury  stock $500,000  00 

Working  capital $500,000  00 

So  far  so  good.  Of  course  the  disposal  of  the  stock  at  par  value  is  out 
of  the  question,  and  it  is  placed  upon  the  market  at,  say,  10  cents  per  share, 
realizing  in  cash  $50,000. 

The  entry  which  covers  the  transaction  usually  runs  as  follows : 

Cash  $  50,000  00 

Working  capital 450,000  00 

Treasury  stock $500,000  00 

In  this  case  stock  is  presented  to  the  company  of  an  alleged  value  of 
$500,000,  and  it  is  perfectly  legitimate  and  proper  when,  at  the  disposal  of 
the  stock,  it  is  found  that  it  has  been  overvalued,  that  the  loss  arising  from 
the  sale  should  be  charged  back  to  the  account  in  which  it  originated.  The 
question  of  the  discount  on  shares  issued  is,  in  the  case  of  mining  companies 
organized  upon  this  plan,  thus  easily  disposed  of. 

Let  us  now  take  the  case  of  a  company  formed  for  the  purpose  of  pur- 
chasing a  mining  property.  The  property  can  be  purchased  for  $45,000 
cash.  The  capital  stock  (authorized)  of  the  company  is  placed  at  $1,000,000, 
in  shares  of  $1  each. 

Of  these  the  promoters  take  450,000  shares  at  10  cents  each,  thus  realiz- 
ing the  $45,000  needed  to  purchase  the  property. 

How  is  this  to  be  got  upon  the  books  of  the  company?  In  the  natural 
order  of  things  the  entry  would  be : 

Cash $  45,000  00 

Discount  on  shares 405,000  00 

Capital  stock,  subscribed $450,000  00 

The  directors  decide  now  to  sell  200,000  of  the  $1  shares  at  25  cents  on 
the  dollar  to  provide  a  working  capital  of  $50,000.  They  succeed  in  doing 
this,  and  then  would  follow  the  entry: 

Cash  $  50,000  00 

Discount  on  shares 1 50,000  00 

Capital  stock,  subscribed $200,000  00 

30 


The  balance  of  350,000  shares  is  left  unsubscribed,  or,  as  the  literary 
accountants  delight  to  call  it,  as  "treasury  stock." 

By  the  above  treatment  of  the  subscribed  capital  stock  you  have  a  plain, 
unvarnished  statement  upon  the  books  as  to  the  position  of  the  company  in 
respect  to  its  capital. 

An  account  in  the  ledger  must  necessarily  be  opened  for  the  "Discount 
on  Shares,"  and  the  query  is  as  to  how  this  shall  appear  in  the  balance  sheet  of 
the  company. 

To  my  mind,  there  are  several  ways  of  treating  it.  The  object  of  show- 
ing the  amount  of  subscribed  capital  stock  in  the  balance  sheet  is  to  furnish 
information  as  to  the  value  upon  which  dividends  are  being  paid.     The  fact 


Asscis. 


Lie>bili~h< 


Mirvrs  Accourch 
N/tacKi  r\c-F»y 
Ones  "irv  dump 
0<i&K  or\  hand 


*45ooo 
15000 
IOOOO 

40000 


1  10000 


00 
00 
00 

00 


o_o_ 


Dills  p<^y^ 

Ledqcp   balances 


■#■   .sooo 

.5000 

loo  000 


1   IOOOO 


€>5oooo 
v5ooo 


GO- .5  OOP 


00 
00 
00 


00 


00 
00 


that  there  is  an  account  upon  the  books  of  the  company  known  as  "Discount 
on  Shares"  does  not  affect  the  company's  credit  adversely,  while  to  carry 
the  account  under  the  heading  "Working  Capital"  would  be  to  deceive  the 
creditors  of  the  company.  How  is  the  average  individual  who  studies  the 
balance  sheet  of  the  company,  finding  thereon  on  the  asset  side  an  entry — 

Working  capital   $555,000  00 

to  know  that  such  is  not  an  asset  at  all,  but  merely  a  fictitious  account 
intended  to  give  the  company  an  appearance  of  substantiality  which  it  lacks 
entirely — although,  as  a  fact,  the  concern  may  be  perfectly  solvent  and 
healthy? 

I  think  the  preferable  way  to  dispose  of  the  item  is  to  call  it  what  it  really 
is  in  the  balance  sheet,  but  to  make  a  subdivision  of  the  statement  as  between 
the  capital  and  trade  assets  on  the  one  side  and  the  asset  known  as  "Working 
Capital  (discount  on  shares)"  ;  and  on  the  liability  side  a  similar  division  as 
between  trade  liabilities  and  the  liability  on  capital  account. 

Another  way  of  treating  it,  keeping  it  in  the  usual  "report"  form  ot 
balance  sheet,  would  be : 

Assets — 

Mines  account   $45,000  00 

Machinery  account 15,000  00 

Ores  in  dump 10,000  00 

Cash  on  hand 40,000  00 

$110,000  00 


Liabilities — 

Bills  payable  $    5,000  00 

Ledger  balances  5,000  00 

Capital    $650,000  00 

Less  discount 555-ooo  00 

95,000  00 


Surplus 


$105,000  00 
5,000  00 


-$110,000  00 


3] 


CHAPTER    XIIL 

4.    4. 

The  Treatment  of  Bonus  Account. 


IN  THE  organization  of  a  corporation  it  is  often  the  case  that  the  original 
incorators  desire  to  pay  for  their  stock  otherwise  than  in  cash  money.  In 
order  to  meet  the  difficulties  presented  by  this  situation  such  accounts  as 
goodwill,  bonus,  franchise,  etc.,  are  opened  on  the  ledger  and  represent  what 
the  company  has  received  for  its  shares  of  capital  stock  in  the  way  of  consid- 
erations other  than  money  or  tangible  assets.  Let  us  consider  some  special 
cases.  A  company  is  organized  with  a  capital  of  $50,000,  and  the  promoter  is 
to  receive  for  his  services  fifty  shares  of  the  capital  stock  at  a  par  value  of 
$100  per  share.  The  usual  entry  is  Bonus  to  Capital  Stock  or  Bonus  to 
Treasury  Stock,  $5,000.  Bonus  is  thus  carried  as  an  asset  on  the  books  of 
the  company,  whereas,  as  a  matter  of  fact,  Bonus  is  an  expense  account  pure 
and  simple.  In  the  organization  of  the  company  the  services  of  the  promoter 
are  just  as  necessary  and  legitimate  as  the  services  of  an  attorney  or  an 
accountant.  For  such  services  the  company  may  pay  in  one  or  four  ways. 
It  may  pay  in  cash,  or  it  may  give  the  promoter  credit  on  open  account,  or  it 
may  give  its  promissory  note,  or  it  may  give  a  certain  number  of  shares  of  its 
capital  stock.  The  first  three  methods  of  providing  for  a  claim  are  familiar 
and  need  no  special  discussion.  The  fourth  method,  which  is  the  one  usually 
adopted,  seems  to  present  some  difficulty.  The  first  point  to  be  made  clear 
is  that  this  is  a  perfectly  legitimate  mode  of  paying  the  promoter  for  his 
services  rendered.  It  is  true  that  this  method  may  be  abused.  The  promoter 
may  receive  a  great  many  more  shares  than  he  is  entitled  to.  But  so  may  any 
other  method  of  payment  be  abused.  The  payment  by  way  of  shares  in  the 
company  stock  is  the  most  equitable  in  that  the  value  of  the  payment  is 
dependent  upon  the  future  success  of  the  company.  If  the  company  succeeds 
the  promoter  may,  if  he  chooses,  sell  out  his  shares  and  thus  turn  his  stock 
payment  into  cash  money.  For  the  company  the  stock  payment  is  the  more 
advantageous  in  that  it  does  not  require  the  outlay  of  cash  money  and  is 
practically  a  lien  only  on  possible  profits.  From  the  point  of  view  of  the 
accountant  the  difficulty  is  to  make  a  proper  disposition  of  the  "Bonus" 
account.  The  entry  "Bonus  dr.  to  Treasury  Stock"  is  simply  a  short  way  of 
telling  a  long  story.  An  accountant  understands  at  once  from  the  entry  and 
from  the  brief  explanation  in  the  journal  exactly  what  has  been  done,  nut  it 
is  not  always  so  plain  to  the  general  public.  It  is  said  that  "Bonus"  appears 
as  an  asset  of  the  company  when,  in  reality,  it  is  not  an  asset  at  all.  It  is 
more  correct  to  say  that  as  against  the  creditors  of  the  company  it  is  not  an 
asset  and  is  not  intended  to  be  stated  as  such,  but  as  against  the  stockholders 
of  the  company  it  is  an  asset.  In  settling  with  its  stockholders  the  company 
may  use  the  Bonus  account  as  an  asset  to  offset  its  liability  on  account  of  the 
capital  stock,  or  to  offset  its  liability  on  account  of  any  undivided  profits.  If 
there  arc  110  undivided  profits,  then  the  capital  stock  is  impaired  to  the  extent 
of  the  Bonus  account.  If  there  are  undivided  profits  exactly  equal  to  the 
Bonus  account  then  in  settling  witli  the  stockholders  the  company  will  offset 
its  liability  on  account  of  capital  stock  by  the  amount  of  the  Bonus  account. 

32 


As  a  matter  of  accounting,  herefore,  a  certain  amount  of  the  profits  should 
be  reserved  each  year  to  equal  the  amount  of  the  Bonus  account.  When  the 
reserved  profits  equal  the  Bonus  account,  the  one  may  be  used  to  offset  the 
other  and  the  Bonus  account  taken  off  the  books. 

■3%       IV*       «*«       J*» 

CHAPTER  XIV. 
a.  a. 

Some  Useful  Definitions. 
x  a. 

PERSONAL  ACCOUNT.— An  account  which  records  the  transactions 
of  a  business  with  its  customers,  creditors,  or  debtors.    An  individual 
account.     Such  an  account  comprises  all  charges  or  debits,  and  all 
credits  of  whatsoever  nature,  the  excess  of  debits  over  credits,  or  of  credits 
over  debits,  showing  the  balance  of  account. 

An  account  representing  indebtedness  of  or  liability  to  a  person. 
An  account  containing  charges  on  which  no  profits  are  made,  such  as 
personal  accounts  for  salaries,  dividends,  traveling  salesmen,  etc.,  as  dis- 
tinguished from  accounts  with  customers  or  creditors. 

*  *        # 

Impersonal  Account. — An  account  which  represents  conditions,  and 
records  the  profits,  losses,  receipts  or  expenditures  of  a  business,  but  does  not 
represent  persons. 

Examples  :  General  expense,  manufacturing  expense,  freight,  discount, 
interest,  repairs,  advertising,  postage. 

*  *       * 

Current  Account. — An  active,  or  running  account.  An  account 
wherein  all  transactions  are  itemized. 

^       *       ^ 

Summary  Account. — An  account  dealing  with  totals  and  not  with 
items.  As  the  use  of  columnar  cash  books,  journals,  and  auxiliary  record 
books  increases,  the  number  of  summary  accounts  tends  to  outnumber  item- 
ized impersonal  accounts. 

Balance,  or  adjustment  accounts,  are  good  types  of  the  summary 
account. 

Representative  Account. — An  account — preferably — whose  func- 
tion it  is  to  complete  the  double  entry  by  representing  the  transactions 
described  or  recorded  by  personal  accounts. 

Thus  sales  account  furnishes  the  double  entry  for  the  customers' 
accounts,  and  purchase  account  that  for  the  creditors'  accounts. 

Also  called  "nominal  account." 

*  *       * 

Adjustment  Account. — A  summary  account  devised  to  render  per- 
sonal ledgers  self-balancing,  so  that  errors  may  be  localized  and  a  great 
saving  of  labor  effected  in  tracing  them. 

33 


The  principle  involved  is  to  make  a  contra  posting  for  every  item  posted 
to  the  ledger  to  be  balanced,  but  to  make  such  contra  postings  in  totals  and 
not  in  detail. 

This  necessitates  separate  books  of  original  entry  for  each  ledger,  or 
separate  columns,  the  latter  being  the  plan  more  generally  used. 

*  *  :|: 

Negative  ACCOUNT. — An  account  which  reduces  the  value  of  some 
other  account.  Thus  treasury  stock  is  a  negative  account  to  capital ;  returns 
is  a  negative  to  sales. 

*  *       * 

Comparative  Financial  Statement. — A  comparative  financial 
statement  exhibits  totals  of  purchases,  manufacturing  expense,  general 
expense,  output,  sales,  etc.,  at  stated  successive  periods,  thereby  securing  a 
comparison  of  cost  of  production,  gross  profit,  and  selling  expenses  on 
amount  of  turnover,  and  facilitating  the  detection  of  excessive  charges  for 
labor,  or  decrease  of  efficiency  in  other  departments  of  the  business. 

*  *       * 

Fixed  Assets. — Fixed  assets  are  those  which  form  a  permanent  and 
essential  part  of  the  business  carried  on,  such  as  real  estate,  machinery,  land 
and  plant  of  a  mine,  roadbed  and  rolling  stock  of  a  railroad,  etc.  They  are 
subject  to  appreciation  and  depreciation. 

*  *       * 

Floating  Assets. — Floating  assets  are  those  which  vary  from  day  to 
day  from  sale,  realization,  or  exchange,  etc.,  such  as  stock-in-trade,  cash, 
accounts  and  notes  receivable,  land  of  a  real  estate  company,  etc. 

*  *       * 

Speculative  Assets. — Speculative  assets  are  those  which  fluctuate  in 
value  from  day  to  day — such  as  stocks,  bonds,  and  "futures"  in  different 
kinds  of  products  dealt  in  by  the  Exchanges. 

Such  assets  as  patent  rights,  goodwill  and  advertising  devices  are  more 
or  less  speculative,  the  latter  often  losing  its  entire  value  the  moment  a 
business  is  suspended  or  closed  out. 

*  *       * 

Balance  Sheet. — A  statement  of  actual  assets  and  liabilities  at  a  given 
date  designed  to  exhibit  the  financial  condition  of  a  business.  It  consists  of 
the  balances  of  assets  and  liabilities  accounts  extracted  from  the  ledger  after 
inventory  has  been  taken  and  the  nominal  accounts  have  been  closed  into 
profit  and  loss,  and  of  outstanding  resources  or  liabilities  not  included  in  the 
books  of  account. 

The  excess  of  assets  over  liabilities  represents  the  profit  made  by  the 
operations  of  the  business  during  the  period  covered  by  the  statement  ;  the 
excess  of  liabilities  over  assets  represents  a  loss.  This  surplus,  or  deficiency, 
is  the  balance  of  the  balance  sheet,  and  must  agree  with  the  balance  of  the 
current  profit  and  loss  account. 

Items  such  as  "surplus."  "reserve."  "undivided  profit,"  etc..  having 
separate  accounts  in  the  ledger,  are  in  reality  sections  of  the  balance  sheet, 
and  should  be  classified  accordingly. 

34 


The  components  of  a  balance  sheet  are,  in  our  opinion,  best  classified  as 
follows : 

Assets — Cash  and  property,  personal,  speculative. 

Liabilities — Negatives  to  property,  personal,  proportion  of  wages, 
taxes,  etc.,  capital,  reserve,  profit  and  loss. 

*  *       * 

Treasury  Stock. — Capital  stock  unsubscribed,  or  of  which  a  corpor- 
ation has  acquired  possession  from  its  original  owners.  Stock  set  aside  for 
sale  in  order  to  raise  working  capital. 

*  *       * 

Reserve  Fund. — An  amount  set  aside  out  of  profits  to  provide  against 
unforeseen  contingencies. 

A  sum  set  aside  to  provide  for  depreciation  of  specified  assets  is  con- 
sidered a  charge  against  assets,  and  as  such,  should  be  deducted  on  the 
balance  sheet  from  the  amount  of  the  assets  involved. 

*  *       # 

Sinking  Fund. — An  amount  set  aside  to  provide  against  anticipated 
losses  on  redemption  of  debentures,  expiration  of  leases,  etc.,  and  specially 
invested.  While,  therefore,  a  reserve  fund  appears  among  the  liabilities  and 
is  simply  a  portion  of  the  surplus  of  assets  over  liabilities,  a  sinking  fund  as 
an  investment  is  an  asset  and  is  so  shown  on  the  balance  sheet. 

The  sums  so  set  aside  and  invested  should  be  sufficient,  with  interest,  to 
amount  to  the  total  outlay  the  sinking  fund  is  designed  to  cover. 

*  *       * 

Suspense  Account. — A  summary  account  to  which  are  transferred 
the  balances  of  doubtful  accounts  from  the  customers'  ledger,  and  in  which 
account  they  are  retained  until  such  time  as  they  can  be  definitely  disposed  of. 
In  this  way  they  are  not  lost  sight  of,  and  can  be  estimated  in  the  balance 
sheet  at  their  proper  value. 

Common  Stock. — The  ordinary  stock  of  a  corporation  on  which  divi- 
dends are  paid  from  the  surplus  earned. 

*  *       * 

Preferred  Stock. — A  special  stock  issued  on  which  a  specified  divi- 
dend is  guaranteed  and  which  dividends  must  be  paid  prior  to  the  holders  of 
common  stock  receiving  any  distribution  from  the  profits  of  an  enterprise. 
Where  a  business  is  very  prosperous  common  stock  may  be  a  much  more 
valuable  investment  than  preferred  stock,  as  it  may  receive  larger  dividends 
according  to  the  increase  of  profits  available  for  distribution,  whereas,  pre- 
ferred stock  can  never  receive  more  than  the  specified  percentage. 

Cumulative  Preferred  Stock. — Preferred  stock  which  is  entitled  to 
all  arrears  of  unpaid  dividends  prior  to  any  distribution  of  profits  among 
the  common  stockholders. 

Non-Cumueative  Preferred  Stock. — Stock  the  holders  of  which 
lose  any  unpaid  guaranteed  dividends  which  the  earnings  of  a  company  were 
insufficient  to  pay  at  date  of  payment. 


Deferred  Stock. — It  sometimes  happens  that  some  portion  of  stock  is 
issued  on  the  understanding  that  it  shall  receive  nothing  from  the  profits  of 
a  business  until  after  the  common  stock  holders  have  been  paid  a  dividend 
of  a  certain  amount,  after  which  deferred  stock  shall  participate. 

*  *       * 

Fully  Paid  Non-Assessable  Stock. — Stock  the  face  value  of  which 
lias  been  paid  by  the  holders  on  the  agreement  that  it  shall  not  be  assessed  by 
the  officers  of  the  company  for  any  purpose. 

*  *       * 

WATERED  Stock. — When  a  corporation  desires  to  evade  its  State  or 
Municipal  tax  or  other  obligations  by  reducing  its  showing  of  profits,  it 
reorganizes  with  an  increased  capital  stock,  arbitrarily  increasing  the  values 
of  its  assets  to  correspond.  By  this  means  the  percentage  of  profits  on 
capital  invested  is  apparently  reduced  and  the  stock  is  "watered." 

*  *       * 

Funded  Debt. — A  liability  or  liabilities  secured  by  bonds.  Unlike 
debenture  bonds  these  bonds  are  themselves  secured  by  mortgages  or  equally 

substantial  security. 

*  *       * 

Working  Capital  is  the  amount  available  to  provide  the  necessary 
expenditures  for  running  the  business.    This  amount  may  consist  of : 

a.  Capital  stock  subscribed  and  paid. 

b.  Capital  stock  sold  by  stockholders  to  raise  cash. 

c.  Dividends  or  surplus  undistributed. 

d.  Part  of  purchase  money  of  business  allowed  to  remain  unpaid. 

e.  Loans  from  banks  or  otherwise. 

f.  Proceeds  of  accommodation  notes. 

g.  Assessment  on  stockholders. 
Etc.,  etc. 

*  *       * 

Debentures  are  unsecured  bonds  issued  for  sale  for  the  purpose  of 
securing  working  capital,  and  interest  on  same  is  a  first  charge  on  profits — 
that  is,  in  priority  to  preferred  or  other  dividends. 


PART  VI. 


Accounting  for  the  Wholesale 

Grocery  and  Hardware 

Businesses. 


ACCOUNTING  SYSTEMS 


FOR  THE 


Wholesale  Grocery  and  Hardware  Businesses. 


The  system  given  below  is  designed  for  a  house  with  a  business  of  a 
million  a  year.  I  have  made  it  for  a  large  business,  because  I  think  it  is 
an  easy  matter  to  fit  a  plan  which  covers  the  operations  of  a  large  concern 
to  the  needs  of  a  smaller  one.  For  instance,  if  the  business  only  required 
one  debit  or  sales  ledger,  the  posting  would  be  made  direct  from  the  sales 
book.  There  would  be  no  journalizing  of  sales  at  all.  The  reason  for 
journalizing  is  that  in  this  business  there  are  four  ledgers,  it  is  necessary, 
in  order  to  be  able  to  balance  separately.    We  will  begin  with  the  original 


,o        O/  \r>    wa^on 


A  a  -  fH  Ave,. 


WEPMEQ 

£,CO, 

a  %  r.cj.pea& 

& 

*3.oo 

1    Ebb!    Gn><3r\.  5u«iaP 

@ 

*5,43 

1    £><^    Pfeurvea 
1    ys.    Dai5y  M'.lK. 

® 

a* 

*4.4o 

order  or  sales  ticket,  as  it  is  also  called.  (See  Fig.  i.)  This  is  a  ticket 
which  is  made  out  by  the  salesman  taking  the  order.  It  goes  direct  to 
the  credit  man,  who,  if  the  customer  is  good  for  it,  "passes"  it  by  putting 
his  initial  or  private  mark  on  it. 


From  the  credit  man  the  ticket  goes  to  the  head  salesman.  He  checks  the 
prices  and  sends  it  to  the  bill  office.  This  office  is  divided  into  two  depart- 
ments— city  and  country.  Each  department  takes  their  orders  and  copies 
them  on  to  loose  sheets  of  the  sales  book.  These  sheets  have  the  common 
journal  ruling  and  are  perforated  so  that  they  can  be  fastened  temporarily 
with  a  McGill  fastener.  In  charging,  two  men  work  together.  In  the  city 
department,  one  calls  off  and  charges  at  the  same  time  and  the  other  takes  the 
dictation  and  makes  the  invoice.  They  figure  separately  and  prove  before 
taking  up  the  next  charge.  The  invoices  are  handed  to  the  shipper.  He 
orders  the  goods  called  for  and  checks  off  each  article  as  it  is  placed  on  the 
wagon  and  gives  the  driver  the  invoice.  Every  customer  receiving  goods 
by  wagon  must  insist  upon  an  invoice  for  the  same.  One  of  the  largest 
houses  in  the  country  follows  out  this  plan  and  has  never  had  a  dispute  with  a 
customer  about  not  receiving  goods.  When  the  customer  accepts  an  invoice 
from  the  driver  it  is  understood  that  he  received  the  goods  the  invoice  called 
for.  In  the  country  department  one  charges  and  calls  off  and  the  other 
makes  the  railroad  receipts.  The  freight  receipts  are  made  in  duplicate  by 
the  use  of  a  carbon  sheet.  These  receipts  are  handed  to  the  country  shipper 
and  checked  on  the  wagon  in  the  same  manner  as  the  city  deliveries.  The 
country  bills  are  made  out  in  spare  moments  or  the  next  day  on  the  typewriter 
in  the  main  office.  If  the  business  is  very  large,  by  using  loose  sheets  three, 
four,  or  as  many  teams  as  are  necessary,  can  work  at  one  time.  At  the  end 
of  the  day  these  sales  sheets  are  fastened  together  and  sent  to  the  main  office. 
The  next  morning  they  are  figured  and  in  a  general  way  the  prices  checked. 
The  sheets  are  then  paged,  taking  up  the  last  number  of  the  day  before,  and 
so  on  every  day  up  to  1,000.  When  1,000  is  reached  these  sheets  are  bound 
into  a  book  and  numbered  I,  2,  3  and  so  on  up  to  100,  when  they  start  at  I 
again. 

The  Sales  Journals. — Each  ledger  has  a  journal  of  its  own.  We  are 
supposing  that  the  business  requires  four  ledgers — A  to  K  City,  L  to  Z  City, 
A  to  K  Country,  and  L  to  Z  Country.  At  the  beginning  of  each  month  in 
the  sales  journal  two  or  more  pages  are  left  for  journal  items,  cross  entries. 


«aTO«    c/T-v-  jO(/««-u. 


Nlcw^r-K    rvi  ,_j   jor,  3i=l+ 

1900 

Thr-^^J 

IB 

0.0 

IS 

2S44S 

,. 

.,-' 

~ 

O  TA^^old                      DO  32 

Tkos  r  K.ng  -r«.eod<v 

^ 

1  = 
132 

->- 

aa 

Dou^Sc-ty  £-Co  Molasaei  9od*> 

='• 

•' 

j. 

etc.  For  ruling  of  sales  journal,  sec  Fig.  2.  The  ledgers  men  have  assist- 
ants whose  duty  it  is  to  take  the  sales  book  and  write  up  the  charges  for  their 
ledger.  (See  illustration  of  sales  journal.)  All  packages  that  are  return- 
able and  such  memo,  as  time  on  certain  goods  are  posted  into  the  ledger. 
The  sales  book  is  then  "called"  back  and  the  journals  checked. 


The  four  journals  are  footed  and  must  agree  with  the  footing"  of  the 
sales  book.  At  the  end  of  the  month  the  totals  of  the  several  journals  are 
credited  to  sales  merchandise  in  the  general  ledger. 

Credit  Journals. — Each  ledger  has  also  a  credit  journal  of  its 
own,  and  is  ruled  in  common  journal  ruling,  with  the  addition 
of  a  line  to  keep  the  checks  (')  regular.  All  credits  for  discounts, 
merchandise  returned,  charged  packages  returned,  etc.,  are  put  through  «"his 
book.  The  returns  are  copied  from  the  receiving  clerk's  book  of  returned 
merchandise.  The  totals  of  these  journals  are  debited  to  sales  merchandise 
at  the  end  of  the  month.  At  the  beginning  of  each  month  two  pages  are 
reserved — one  for  interest  account  and  the  other  for  bills  receivable.  The 
headings  of  these  pages  read  "Sundries  Dr.  to  Interest"  and  "Bills  Receivable 
Dr.  to  Sundries."  This  does  away  with  making  a  journal  entry  every 
time  there  is  an  item  for  these  accounts.  The  totals  of  these  two  pages  are 
posted  to  their  respective  accounts  in  the  general  ledger.  The  bills  receivable 
items  can  be  posted  separately  if  desired,  but  the  intelligent  use  of  a  bill 
book  makes  it  unnecessary. 

Sales  Ledgers. — These  are  loose-leaf,  but  are  not  indexed  as  is  custom- 
ary. They  are  paged.  A  customer  has  the  same  page  as  long  as  he  deals. 
When  one  page  is  full  another  is  paged  with  a  numbering  machine  and  put 
in  its  place.  It  is  necessary  to  carry  a  separate  index  with  this  plan.  The 
reason  for  paging  the  ledger  is  that  by  this  method  a  salesman's  accounts  are 
kept  together.  Every  salesman  has  50  or  100  pages.  For  instance:  Per- 
kins' accounts  run  from  1  to  50;  Wilson's  from  50  to  100;  Jones,  having  a 
greater  number  of  customers,  has  the  pages  from  100  to  200,  and  so  on  with 
the  other  salesmen.  Probably  Perkins'  accounts  take  only  24  pages.  The 
next  page  in  the  ledger  will  be  50,  the  first  of  Wilson's  accounts.  If  Perkins 
gets  a  new  customer,  page  25  is  put  in.  The  ledgers  are  ruled  as  per  Fig.  3, 
and  explains  itself.  The  sales  are  posted  by  the  sales  book  page  and  not  by 
journal  page.  See  illustration  of  sales  journal,  also  of  ledger,  which  shows 
sales  book  number  and  page.     As  bills  are  paid  they  are  checked  off  along 


O.r 

■  eo 

. 

■•/» 

-','■ 

t)Of> 

a 

32 

IO 

•  O 

r-c 

1  O 

58 

31 

'?.'; 

,  O  9 

1  ae 

Si 

rel. 

^ 

eo 
$01 

<3 

0.5 

IZ& 

t>- 

C. 

52 

1  S.S 

A -7 

is 

"9 

' 

CJ 

I03 

' 

O  -. 

i-a 

~>3 

with  the  credits  balancing  them.     (See  Fig.  3.)     All  charges  and  credits 
open  should  make  up  the  "balance."     With  all  cash  turned  in  the  salesman 


must  give  the  book-keeper  a  settlement  slip  showing-  just  what  bills  are  paid- 
(See  Fig.   7.) 


&C-rTL-FM£/V7 


F-   q    w;U<-,r-s . 

H-h     A /no                ^««" 

v       FWKir,*            . 

isoe 

/      4. 

3l 

i_«»»  J  ;»='■}•.  1/31 

1  0 

105 

SO 

02 

ise 

.52. 

OS 

1  2.5- 

47 

The  Cash  Department. — To  begin  with,  the  bank  account  is  kept  on  the 
stub  of  the  check  book.  The  books  used  are  as  follows  :  ( 1)  blotter  cash, 
(2)  daily  cash,  (3)  auxiliary  cash,  and  (4)  a  memorandum  book  called 
C.  O.  D.  and  cash  sales.  The  blotter  cash  is  a  common  book  into  which 
is  written  in  pencil  all  receipts  (of  all  kinds)  and  payments  of  cash.  There 
are  two  blotter  cash  books,  used  day  about. 

The  Daily  Cash. —  (See  Fig.  4A  and  4B.)  This  book  is  a  copy  of  the 
blotter  cash  and  of  the  regular  check  book.     All  postings  are  made  from  this 


on 

■ZASti 

Date 

i-eo 

„*„* 

£,%Z 

l.  r&  -z.    I!  A  /a  aa 

£**Y 

-S^i-CS 

GEHEOAL.  1  AMOUNT 

100 

d«n 

1 

To   Balance 

35820 

07 

'  32  I 

T.  F,<Joknfior\ 

SZ 

35 

52  35 

SOB 

R.l=   ^rn.+k 

ei 

25 

61    25 

'  Bio 

W  T=.  Do^»e 

1  1 

00 

1  1 

00 

'     AZ 

A  D   AcJarr>& 

32 

32 

OO 

'  ©0 

252 

' 

35                ' 
I        252 

35 

'     93 

P/R     W.rDose 

3SO 

1       3S° 

'   \50 

\r& 

1 

32I                1 

32 

. 

CA£>n 

C« 

DATE- 

rcuo 

IVAMA^ 

c,"?£ 

e"~$ 

eoJS-TOy 

<_  rt>  3. 

r*D^E 

GErslEOAL- 

AMOUKIT 

ISO 

> 

MJae  Am.  S>uA  R  %  Co 

1  1  02 
5043 

32 

1  I02 
50S 

00 

"•1 

CxpWI    Deed  wp  waaois 

Mcfse     PP.R    rn+.Su^ao 

TTPeJohnaon,  pro.ck.et 
Kldac.  exp.&rpt.  Pr  ABC 
Exp*.  Cxp.Crnt       " 
Expense                     " 
S><sle&  Evpervsee.    * 
Lakop 
£>v  Balance 

.S3 

■T5 

e  1 

235 

38 

240 

308  2 

OOO 

4892 

OO 

sa 

OS 

240 
©4 
53 

285 
32. 

30s  a 
e>oo 

4392 
3CVlftO 

00 
3a 
as 

so 

OS 

ae 

book.  An  assistant  writes  up  the  daily  cash  and  must  be  familiar  with  the 
accounts  in  the  several  ledgers.  The  stubs  of  the  check  book  state  the 
account  to  which  the  charge  belongs  and  the  amounts  are  extended  in  the 
proper  columns.     The  "merchandise  column"  is  posted  in  total  to  the  Dr. 

8 


of  merchandise  in  the  general  ledger.      (The  footings  of  the  columns  are 
carried  on  day  by  day  to  the  end  of  the  month  and  a  summary  made.) 

The  auxiliary  Cash  Book. —  (See  Fig.  5.)     This  is  a  cash  book  with 
only  one  side.      It  could  be  called,  just  as  well,  the  auxiliary  disbursing  cash 


AUX.IL-IAOV    CA5n    £>OOK 
CASn     o«a 

o*yc 

^ 

noi-10 

paranoic 

/-ox  «f«o 

"££££ 

uA.aoa 

+MOUHT 

IOOC 

31 

e>s 

P.D.R.  b',11* 

Mafewarv    DarxK  Exck 

&>*>>,    Roll 

WT  roster.  Exp  Deo 
To  Doily  Cask    DooK 

■3  a 

OS> 

' 

as 

■  3>A 

OS 

SO 

\OA-Z 

4 

OO      SO 

OO  lOA-Z 

3A 

50 
33 
OO 
OO 
36 

285 

00 

32 

5  2 

2>082  50 

6O0 

OS 
.;.-■ 

4892 

86S632 
AS.        _ 

93 

;>.-. 

o.«. 

book.  It  is  handled  only  by  the  cashiers  and  the  general  book-keeper.  Items 
of  cash  or  checks  given  which  come  under  the  division  as  illustrated  are  put 
through  this  book.  Items  of  a  private  nature,  such  as  payments  of  salary  to 
officials,  heads  of  departments,  etc.,  and  checks  for  dividends,  or  anything 
which  it  would  be  better  not  to  put  through  the  daily  cash  book,  can  be  put 
through  there.  There  is  a  posting  column  and  items  can  be  posted  direct  to 
their  proper  accounts  in  the  general  ledger  from  here.  At  the  end  of  the 
month  the  totals  of  the  columns  are  written  into  the  daily  cash  book  and 
posted  from  that  book.  The  balance  of  the  auxiliary  cash  book,  which  has 
been  posted  direct,  is  written  into  the  daily  cash  book  as  "sundries"  and 
marked  "||"  in  the  posting  column,  which  shows  they  have  been  posted  else- 
where. (See  illustrations,  Figs.  4A  and  5.)  This  will  make  the  daily  cash 
book  at  the  end  of  the  month  show  the  actual  cash  on  hand.  A  separate 
check  book  can  be  kept  for  the  payments  of  a  private  nature  spoken  of,  the 
footing  to  be  carried  into  the  regular  check  book  where  the  bank  account  is 
kept.  The  cash  sales  and  C.  O.  D.  items  are  credited  in  one  sum  to  "cash 
sales"  and  extended  into  that  column  at  the  end  of  each  day.  The  total  of 
this  column  at  the  end  of  the  month  is  credited  to  "sales  merchandise."  A 
number  of  pages  of  the  sales  book  is  reserved  each  day  for  charging  C.  O.  D. 
and  cash  sales.  The  name,  carrier  and  amount  is  copied  into  a  book  for  that 
purpose  and  the  charge  "lined  out."  As  they  are  paid,  they  are  checked  off. 
Purchase  Department. — This  department  checks  all  bills  and  pays  them. 
The  items  of  the  invoice  are  checked  by  the  receiving  clerk's  book — "goods 
purchased."  The  bills  are  kept  on  file  until  checked,  when  they  are  placed  in 
a  cabinet  with  31  pigeon-holes  numbered  from  1  to  31.  These  numbers  are 
the  dates  of  the  month  when  bills  are  clue.  For  instance,  a  bill  is  dated  Jan- 
uary 10th  and  due  on  the  20th.  That  bill  is  placed  in  pigeon-hole  No.  20. 
On  that  date  all  bills  in  that  compartment  are  taken  out  and  paid.  The 
general  books  are  ledger,  journal  and  cash  book.     The  trial  balance  shows 


the  accounts  in  the  general  ledger.  There  are  no  accounts  kept  with  the  sales 
ledgers  in  the  general  ledger.  With  so  much  transferring,  cross  entries,  etc., 
between  these  ledgers  and  the  general  ledger  it  would  require  considerable 
"journaling"  to  keep  them.  Their  balance  sheets  are  sufficient,  which  are 
proved  as  per  Fig.  6.     As  the  cash  postings  have  been  made  from  the  daily 


r*b.  ZQ-/0OO 


vJinv.3i/oo    ■a&.zso 

Cask 

3ae47 

■    A 

5aUe.                34^02 
Cask                       266 

O  S 

932 
692 

:  a 

13 

25 

c  ,s 

O0 

(     *2 

as 

X         " 

•/   2SO 

39 

32 

0  1 

X              M 
65 

0  a 
SO 

^       13 

0<r> 

36,564 

s  e 

V3S2 

•-:  0 

809I4 

70 

3S564 

Sfi 

B^l   rcL> 

2a/oo 

A.  2  350 

'■;> 

AmouO'&  rnonKed    wife  X  arc   7r>or\o 
cn+nies     and    Hkc     oike^s. 

fe»»S   a,fFe-o+- 

C»p.-h.l    5WK 

300000 

- 

Qe~=-~e.       ./„ 

SOO  2  20 

.0 

200000 

Plant"   rviAoK.rve.w-y    «4e 

.3  3-aO  53 

300  iO 

B.Me    Rece..~.oble; 

■  5 

95^216 

B.IU       P*y*bl  = 

•  OOOO 

L-abort 

100  360  32 

Inte^ooT" 

.'OC6 

>~ 

k.u.»ce     ("-~e.p.r.ed«32*   ) 

16O8 

03 

Cpen.se    "/^(^.^t^ytea,,'^  1 

96  7  78 

.  0 

O  193 

as 

620 

o.=.K 

37-35 

S^ndny      CrtJfe.1     «/~ 

35020 

A*.K  C.+y  Ud«en  per  bol    booK 

JfZ3SO 

« 

3  7D52 

.'.3 

l_   iiZ           '             *                                ' 

5-3K2 

T3 

and  auxiliary  cash  books,  the  general  cash  book  will  deal  with  totals  only — 
each  day's  total  Dr.  and  each  day's  total  Cr.  marked  "j|"  in  the  column  to 
show  it  has  been  posted.  All  the  bills  for  goods  received  before  the  end  of 
the  fiscal  year  and  counted  in  the  inventory  but  not  paid,  are  journalized — 
charged  to  merchandise,  expenses,  etc.,  and  credited  to  "sundries"  (credit- 
ors') account.  Later  when  these  bills  are  paid  the  amounts  are  charged  to 
"sundries"  account,  thus  balancing  it. 

The  Trial  Balance  (Fig.  8),  the  P.  and  L.  Statement  (Fig.  9),  and  the 
Balance  Sheet  (Fig.  10)  need  no  explanation. 


L033    •S  TA  TCMEMT 


-5cl«.  Me 

»okAncl.A«v 

*&&a"4&ll 

MePC-Nandiae        •  600  220 

/ 

2-ao  120.6 

W«r 

e.e>f 

1  626  32 

2^7  7j,40 

l—Un 

•ioa.300.32 

In«-ononc« 

•  606.03 

ln~onTor-y 

...       J2.iO 

•  A33.9» 

C.pen  — 

©e.7  vs.  10 

lrwe.nfe.y- 

eseooas 

Sole^en- 

c'f 

6    1  934S 

A^e-Tr-.n.* 
Dono77br\« 

020. 

1_  OM     or. 

oceoorAc. 

3  700 

e>  r. 

Depr«»+f<, 

rx      PU4  70 

750, 

rnC.WA4onc.eic.           1  500 

2.9  I93W 

Met    prof.r 

/Oeoo/ClTon 

cj  /n*  &o*tn</ 

Q.v.d.r-d     •/..                                «   2 

OOOO 

/- 

036; 30 

26  36.   SO 

ASSETS       £.    WA&iL-l  riSS 

Red    C^TA+e 

200000 

Ple>n+  MAoK.neoy   efe- 
Ttoms  Waoom'e  ncrntss 

14790 

OS 

eos.o 

so 

92  .OS 

1  .'> 

Cxpen.se    Stbc  K  (feed  ete  on  Kind) 

691  1 

a. 

Incuecnoe.  Lrupu'eo) 

22 

1  0 

Cash  on  V\And  4V  in  De-nKy 

57  135 

1   1 

D.lla     Rrccvablc 

23858 

1  5 

Acct&Rece.voblc,    prnLcddc^a 

■oooeo 

1  ' 

0»p.ti»l    StIocX 

500000 

HoC»vc      V- 

1  U.03 1 

0  1 

D"C   Sundry    CneJ.-fe^O 

33020 

1  i 

D.llj.      Poyakle. 

10000 

D.v.derxd      */^ 

:■"■>■-. 

•-■ 

In  the  following  system  of  accounting  the  necessary  books  are :  Pur- 
chase Journal,  Check  Register,  Order  Register,  Journal-Cash  Book,  Pur- 
chase, City  and  General  ledgers,  separate  honks,  and  three  Country  Sales 
ledgers,  in  which  the  accounts  are  classified  by  States.     For  instance.  "A" 


10 


ledger  will  contain  accounts  in  Wisconsin  and  Michigan;  "B,"  Minnesota, 
North  and  South  Dakota;  "C,"  Iowa,  Montana,  and  miscellaneous.  If  col- 
lections are  made  by  travelers,  we  would  classify  our  accounts  by  travelers' 
routes,  but  a  salesman  is  handicapped  by  giving  attention  to  collections,  and 
they  do  not  usually  make  good  collectors  anyway.  As  collections  are  to  be 
made  from  the  office,  we  classified  accounts  as  first  mentioned. 

A  labor-saving  system  is  not  where  all  your  books  are  bound  in  one  or 
two.  Some  prefer  only  two  books — a  bound  ledger  large  enough  to  hold 
accounts  that  may  be  opened  for  all  time,  a  200-pounder,  requiring  a  ware- 
house truck  to  transport  it  and  a  derrick  hoisting  apparatus  to  handle  it ;  a 
sixty-column  journal  to  match  that  requires  a  plumb  line  to  guide  your  eye 
across  the  page.  In  such  a  journal,  when  you  have  a  certain  class  of  entries 
to  make,  for  instance,  a  page  of  creditors'  invoices,  you  use  two  columns,  the 
balance  of  the  page  goes  to  profit  and  loss.  As  we  must  buy  before  we  could 
sell,  one  of  the  first  questions  that  suggests  itself  is  a  method  for  handling 
invoices  of  goods  purchased.     Please  note  form  No.  i,  purchase  journal,  a 

PUDCHASE.    .JOUDNAL 


Name- 

DemanK* 

Oredi"tbr.s» 

Pa.d 

Date. 

A 

Pay 

Cu.»Jbrr\ere> 

Gerjeral 

sq] 

£," 

IS" 

2-S 

- 



book  in  which  all  purchase  invoices  are  entered — name,  date  and  amount, 
and  from  which  all  postings  are  made  direct  to  the  purchase  or  creditors' 
ledger,  except,  of  course,  any  items  that  might  appear  in  the  other  two 
columns,  customers  and  general.  They  are  there  for  a  purpose,  which  will 
be  explained  later.  This  purchase  journal  embodies  a  feature  also  for  keep- 
ing track  of  invoices  to  pay,  assuming  that  all  bills  shall  be  discounted.  It 
is  desirable  that  certain  days  be  set  aside  for  settlement  of  purchases,  and  as 
most  all  grocery  goods  are  discountable  in  from  ten  to  fifteen  days,  the  5th, 
15th  and  25th  of  the  month  are  good  settlement  days  for  "out-of-town"  pur- 
chases. To  clearly  illustrate  I  will  give  an  example.  Presuming  we  have 
entered  a  number  of  invoices  from  different  firms,  dates  ranging  from  the  1st 
to  the  15th.  Opposite  each  amount  of  those  invoices  dated  from  the  1st  to 
the  10th  we  place  an  X  check  mark  in  the  column  headed  "15th,"  and 
opposite  invoices  of  a  later  date  we  check  in  the  "25th"  or  "5th"  column,  as 
the  case  may  be,  figuring  ahead  about  ten  days  from  the  date  of  the  invoice. 
It  will  be  seen  that  when  we  refer  to  this  purchase  record  on  our  settlement 
days,  the  invoices  due  to  pay  or  discount  are  indicated  to  us  at  a  glance,  and 


11 


we  turn  to  the  invoice  clip  for  the  desired  bills,  which  have  now  been  through 
the  buyer's  hands,  prices  OK'd,  extensions  checked,  etc.  We  will  settle  all 
city  accounts  once  a  month,  checking  the  statements  rendered  to  us  with  our 
ledger  accounts,  and,  of  course,  examining  all  the  bills  and  attaching  them 
to  the  statement,  which  shall  be  our  voucher  for  the  disbursement.  Let  us 
follow  a  creditor's  invoice  through  the  "mill."  It  is  received,  recorded  in 
purchase  journal  and  settlement  date  checked.  We  then  copy  into  a  freight 
receiving  book  (which  shall  be  nothing  more  than  a  book  with  horizontal 
rulings,  200  or  300  pages  about  8x12  inches),  the  name  of  shipper,  car 
number,  if  any,  routing,  then  the  items  any  other  information  that  the 
receiving  department  should  know.     We  stamp  the  invoice  with  a  rubber 

stamp  something  like  this  :     Price  OK ,  Extensions  OK ,  Items 

OK ,  Receiving  Book  Page Note  the  receiving  book  page 

thereon  and  pass  it  to  the  buyer,  who  OK's  the  prices  or  makes  note  of  any 
overcharges— notes  that  freight  is  to  be  deducted  perhaps— after  which 
extensions  are  checked  and  the  invoice  put  on  the  clip  for  settlement  in  due 
time.  Post  all  invoices  to  your  ledgers  just  as  they  are  rendered,  errors 
and  all,  if  there  are  any.  Wrhen  you  pay,  make  your  remittance  statement 
from  the  invoice,  and  charge  back  any  errors,  overcharges,  freight  allow- 
ances, etc.,  through  the  check  register  at  the  time  you  charge  the  account 
with  the  check,  referring  always,  of  course,  to  the  ledger  account 
to  ascertain  that  there  are  no  debit  items  to  be  deducted  in  settle- 
ment and  which  would  not  show  on  the  invoice  goods  returned 
perhaps.  When  an  invoice  is  paid,  so  mark  it  with  a  paid  stamp, 
note  the  check  No.  thereon,  and  stamp  "Paid"  opposite  the  amount 
in  your  purchase  journal  with  a  neat  little  rubber  stamp.  A  blank  statement 
(for  No.  2)  on  the  back  of  the  check  is  a  good  idea,  and  nothing  more  will 


-H*,  ~,tU    Jk  Jv  '»~-J  ">  fo«   **«lmri     of 
—   .+„V.J     t.l.~.                ,                     ,                    , 
IF    fourjd    .^correct     p)*»=«  ret-ufr)     cbec 

k 

~ 

i 



'd> 

,. 

be  needed  for  most  settlements.  It  is  well,  however,  to  have  a  separate 
blank  remittance  form,  and  when  this  is  used  take  an  impression  and  note 
the  copy-book  page  on  the  back  of  the  check.  Our  checks  will  be  made  with 
Stubs,  and  nol  bound  in  book  form,  but  put  up  in  tabs  of  100  each.  We 
will  not  often  have  use  for  the  stub,  for  when  we  draw  checks  for  settlements, 


L2 


we  will  make  our  entries  in  the  check  register  direct  from  the  check.  How- 
ever, we  will  have  the  stub  there  in  case  it  is  needed.  It  may  be  more  con- 
venient sometimes  for  the  book-keeper  to  make  a  stub  memorandum  tem- 
porarily, or,  a  member  of  the  firm  might  draw  a  check,  in  which  case  we 
would  not  want  him  to  make  entries  in  our  books. 

Order  blanks  will  be  ruled  like  form  No.  3.     Salesmen  should  be  fur- 
nished with  pocket  order  books  for  their  convenience,  but  we  will  require 


0 

0 

DATE   SOUD 

&n/  °r>     to 

roL.10 

DATE.  OECD 

TOWISI 

•Snip  ov 

REMA.QXS 
•SALESMAN 

•STATE.. 

DATE  SILLED 

etArririG 

PH0.DM.HBCO 

TEHMO 

U/MIT 

OW..1.SA 

O.tC.O     L3-T 

CfiEO/T 

1 

r -,,-)- 

i. 

CMKVTJM 

RactVg). 
Ope-ck, 

Quart"  I 
"title  e.  I 

RcQ'.-^rcr* 

No 

We.^t 

Price 

•5&)^&rp\cn  rr*J^i  not 

~S  0 

«?lo 

/ 

1 

■  ...  I 

them  to  send  all  orders  in  on  regular  order  blank  forms.  Before  they  start 
out,  drill  them  well  on  the  subject  of  writing  orders  legibly,  to  use  special 
care  in  spelling  names  and  places,  and  little  trouble  will  be  experienced  from 
that  source.  When  orders  are  received  they  should  be  stamped  with  date 
of  receipt  and  passed  to  the  desk  of  the  credit  man,  who,  if  he  passes  favorably 
upon  it,  would  put  his  official  OK  thereon  in  the  proper  space  for  it.  The 
order  should  then  be  passed  to  an  entry  clerk,  that  date,  name  of  customer, 
town  and  state,  may  be  entered  in  the  Order  Register  (form  No.  4),  which 


OPlDEFi    REGf&T/zQ  And  •SAUZ3,P>ZCOf>D- 

Da^c 

No 

Name 

towr\ 

stak 

^5a)jT3r7v«rv£>      S.S>Ve-£» 

AW.M 

sore-a 

WAMarr 

W.M.Duroo 

M 

»'.) 

M 

1 

1 

1 

[ 

" 

1 

i 

will  serve  also  as  a  Salesmen's  Sales  Record,  as  we  are  to  base  their  salary 
somewhat  upon  the  volume  of  their  sales.  It  will  be  observed  that  the  lines 
are  numbered  numerically,  and  when  an  order  is  entered  the  register  number 
is  stamped  thereon  with  a  numbering  machine  or  pen,  as  preferred. 

13 


'To  keep  a  copy  of  all  orders  In  the  office  for  fear  that  one  may  be  lost 
in  the  shipping  room  is  a  waste  of  time  and  money.  Furnish  the  shipping 
department  with  a  supply  of  order  holders  (there  are  a  number  of  excellent 
ones  on  the  market),  impress  upon  shipping  department  and  packing  room 
men  the  importance  of  returning  all  orders  that  pass  through  their  hands,  and 
I  would  not  be  surprised  if  there  never  was  an  instance  of  a  lost  order.  We 
have  it  registered,  and  if  it  does  not  come  back  promptly,  let  it  be  the  duty 
of  some  of  the  office  force  to  ascertain  the  reason. 

Now,  while  it  is  probably  not  desirable  to  keep  separate  department 
accounts  on  our  ledger,  for  shipping  purposes  we  will  have  what  we  might 
call  the  bulk  and  shelf-goods  departments.  In  the  shelf-goods  department 
we  will  keep  candies,  cigars,  pipes  and  all  small  box  goods.  The  original 
order  should  go  to  the  department  which  is  to  supply  the  larger  number  of 
articles.  To  illustrate :  If  an  order  called  for  two  barrels  sugar  and  quite 
an  assortment  of  cigars,  candies,  etc.,  the  original  order  would  go  to  the 
shelf-goods  department,  the  sugar  part  would  be  copied  off  on  a  memoran- 
dum slip  and  given  the  same  register  number  as  the  original.  The  slip 
could  be  smaller  in  form,  ruled  with  quantity  column,  for  name  of  customer, 
town  and  state,  but  used  only  to  facilitate  getting  out  goods  for  shipment, 
the  slip  going  to  the  bulk  goods  department  when  the  original  went  to  the 
other  department,  and  vice  versa,  the  original  always  going  to  the  depart- 
ment supplying  the  most  goods  on  the  order.  When  the  shipment  is  com- 
pleted, the  order,  with  the  memorandum  slip  pinned  to  it,  if  any,  is  returned 
to  the  office  and  compared  to  ascertain  that  no  item  on  the  slip  is  crossed  off 
as  being  out  of  stock,  and  if  so,  must  be  crossed  off  the  original  and  back- 
ordered.  It  will  be  found  that  the  majority  of  orders  can  be  filled  from  the 
original,  and  by  this  order  method  we  obviate  making  more  than  one  bill  for 
a  shipment,  which  is  frequently  done  by  many  large  houses.  The  order  is 
now  ready  to  be  priced,  if  prices  do  not  already  show,  figured,  the  extensions 
checked  and  billed.  Billing  on  the  typewriting  machine  is  the  neatest  and 
most  rapid  way.  Orders  are  now  stamped  A,  B,  C  or  D,  as  the  case  may 
be,  for  its  respective  ledger,  and  it  is  "up  to"  the  book-keepers,  and  we  ought 
to  have  about  three,  including  the  cashier,  for  5,000  accounts,  or  about  1,500 
accounts  to  a  man.  Mail  orders  will,  of  course,  have  to  be  copied,  but  we 
can  furnish  our  better  customers  with  blanks  and  reduce  order  copying  to  a 
minimum. 

The  Sales  Ledger  will  be  the  loose-leaf  style,  ruled  as  shown  by  form 
No.  5.  In  most  grocery  accounts  the  debits  exceed  the  credits  two  or  three 
times,  and  to  save  space  and  make  the  account  more  compact  we  will  have 
two  debit  to  one  credit  column.  Each  ledger  is  self-indexing.  That  is,  to 
each  letter  of  the  alphabet  is  apportioned  a  certain  number  of  pages  and 

14 


each  division  has  its  index  page,  with  its  tab  bearing  a  letter  of  the  alphabet 
marking  that  division.  By  exercising  a  little  ingenuity  a  book-keeper  can 
so  arrange  and  classify  the  accounts  on  the  index  page  that  to  locate  a  name 


is  almost  instantaneous. 


' 

DATING 

HAME 

Date 

DocR 

l.lllO 

rvb.+ 

W-Ac 

DooK 

loin:,:  L 

cb,l 

Credit 

f&l.o 

DooK 

Date 

Due 

o 

r 

o 

We  will  not  take  off  monthly  the  -balances  of  our  sales  accounts  in 
detail,  but  by  the  use  of  a  separate  column  for  customers,  creditors  and 
general  ledger  items  in  all  the  books  of  original  entry,  we  ascertain  at  the 
end  of  the  month  the  total  debits  and  credits  that  have  been  posted  that 
month  to  customers  or  creditors  accounts,  and  we  post  these  totals  to  cor- 
responding accounts  in  the  general  or  private  ledger,  which  represent  the 
balances  on  our  sales  and  purchase  ledgers.  By  this  method  our  trial 
balance  is  confined  to  our  general  ledger,  and  if  we  have  proved  during  the 
month  our  postings  to  our  sales  and  purchase  accounts,  the  taking  of  a  trial 
balance  is  the  least  of  our  troubles. 

There  are  numerous  schemes  for  proving  postings.  Suffice  to  say 
that  any  book-keeper  with  a  "proof  of  postings"  hobby,  can  ride  it  as  freely 
with  this  system  as  any  other.  Where  more  than  one  book-keeper  works 
on  the  books,  it  is  not  a  bad  plan  to  use  slips  for  posting,  dropping  one  slip 
in  the  ledger  for  each  amount  posted,  then  one  calling  back  the  items  to 
another  who  takes  them  down  with  a  pen  or  on  an  adding  machine.  By 
this  method  we  can  have  debit  and  credit  slips  for  each  sales  ledger,  and  for 
our  purchase  ledger  as  well,  thereby  making  it  possible  to  prove  each  ledger 
independent  of  the  other,  whenever  it  is  desired  to  take  off  the  balances  of 
accounts  in  detail. 

One  quite  important  feature  of  the  sales  ledgers  needs  an  explanation — 
that  of  the  due  column.  The  terms  on  which  most  goods  in  the  grocery 
business  are  sold  is  30  and  60  days,  and  accounts  are  usually  quite  active ; 
that  is,  here  are  numerous  charges  each  month.     We  would  render  a  state 

15 


merit  of  all  unsettled  accounts  once  a  month  only.     Statements  are  printed 
with  a  foot-note: 

"Above  is  a  memorandum  of  your  account,  of  which  $ is 

due   We  send  each  customer  a  statement  at  the  end  of 

every  month  for  comparison  of  accounts.  If  NOT  correct,  please 
advise  us  at  once.  If  not  otherwise  advised,  we  will  consider  ourselves 
at  liberty  to  draw  AFTER  MATURITY  without  further  notice. 

"Yours  respectfully, 
"TWENTIETH  CENTURY  GROCERY  CO." 

If  an  account  is  past  due,  we  will  leave  the  space  after  "is  due"  blank; 
if  it  is  due  on  a  certain  future  date,  we  so  mark  it;  if  several  bills  are  due 
at  different  future  dates  not  far  apart,  we  assume  an  average  date;  if  an 
account  should  show  two  bills,  for  instance,  one  due  the  5th  and  the  other 
the  25th,  we  would  mark  the  two  items  and  the  two  dates  on  the  statement. 
Then  these  amounts  and  dates,  as  shown  on  the  bottom  of  the  statements, 
are  noted  in  the  due  columns  of  the  respective  accounts,  about  on  a  line 
with  the  last  credit  item.  Then,  after  our  work  incidental  to  the  first  of 
every  month  is  out  of  the  way,  we  will  go  through  the  ledgers  and  stamp  the 
current  month  before  the  due  amount,  using  a  neat  little  rubber  stamp  and  a 
red  ink  pad.  Now,  on  the  10th  and  20th  of  each  month,  we  will  make  sight 
drafts  for  all  due  or  past  due  accounts.  In  running  through  the  ledgers 
our  eye  quickly  catches  the  items  stamped  the  current  month,  and  by  reason 
of  the  credit  side  of  the  account  being  reversed,  the  amount  column  to  the 
left,  the  close  proximity  of  the  last  credit  date  to  the  due  amount  indicates 
at  a  glance  that  a  payment  has  or  has  not  been  made  since  the  1st  of  the 
month,  which  determines  whether  we  shall  make  a  draft  or  not.  One  reads 
the  name  and  amounts  to  another,  who  writes  them  in  a  Collection  Register, 
with  numbered  lines,  and  calls  back  the  No.,  which  will  be  the  draft  number. 
This  number  is  noted  across  the  due  amount  in  red  ink.  When  amounts 
have  all  been  drawn  off,  the  name  of  banks  are  filled  in  on  the  register  and 
the  draft  is  then  made  from  the  register.  Drafts  and  remittance  letters  are 
written  at  the  same  time  by  the  use  of  pen  carbon  paper.  The  draft  and 
remittance  forms  are  put  together  alternately  in  tabs  of  100  each  and  the 
printed  matter  so  arranged  that  when  the  draft  is  written  the  remittance  blank 
is  filled  in  at  the  same  time.     Collections  are  sent  direct  to  country  banks. 

Good  rating  does  not  always  mean  good  credit.  The  manner  in  which 
a  customer  meets  his  bills  is  an  excellent  criterion  to  be  guided  by  in  granting 
credits.  And  this  scheme  of  keeping  a  record  of  due  amounts  on  the  ledger 
has  many  advantages.  It  enables  the  credit  man  to  tell  at  a  glance  how 
promptly  accounts  are  paid,  how  long  an  account  is  past  due.  whether  cus- 
tomer pays  drafts  or  not,  and  whether  there  is  one  out  for  collection. 

10 


The  Check  Register  (form  No.  6)  is  a  reversal  of  the  usual  order  of 
things  in  book-keeping.  The  right-hand  page  is  all  debit  columns.  We 
get  the  debit  and  credit  of  our  bank  account  from  the  two  left-hand  columns, 
and  if  we  keep  them  footed  in  pencil  on  the  same  line,  the  state  of  the 


CrfECK     PEO/5TEA 

Deposit's 

Checks  Drawn 

To 

Fo  o 

cptDiTona 

Accounts 

Cuslomers 
Accounts 

Deduci'on&   D  «■!=.. + 

Date  A 

nourjt 

Am 

ount 

Nqj 

Date 

Cat>bD.a|5b+<i.i>CMis 

fF-^M 

Dc-b,+ 

De 

,;t 

j- 

^ 

3 

^ 

bank  funds  is  plainly  shown.  The  right-hand  page  provides  columns  for 
a  distribution  of  all  funds  disbursed  through  the  bank.  A  check  is  seldom 
drawn  that  is  chargeable  to  a  sales  ledger  account,  but  we  will  make  pro- 
vision for  an  emergency  and  have  such  a  column  in  the  check  register. 
Reference  has  already  been  made  to  settlements,  but  perhaps  the  three  col- 
umns, cash  discount,  overcharges,  and  freight,  under  the  head  of  creditors, 
need  an  explanation.  After  entering  a  check  in  check  column,  crediting 
bank,  we  enter  the  same  amount  to  the  right,  debiting  creditors,  and  on  the 
same  line  in  their  respective  columns,  cash  account,  overcharges,  and  freight, 
one  or  all,  as  the  case  may  be.  We  post  to  the  individual  creditor's  account 
each  of  the  last-named  items  separately.  In  fact,  we  post  separate  items 
from  all  the  columns  in  this  book,  excepting  only  from  the  bank  columns, 
which  are  posted  in  total  at  the  end  of  each  month.  As  heretofore  mentioned, 
we  must  keep  the  equilibrium  of  our  general  ledger ;  we  therefore  post  also 
the  total  of  the  four  columns  under  the  heading  of  creditors  to  the  debit  of 
creditors  account  in  the  general  ledger,  credit  returns  and  rebates  purchases, 
and  credit  discount  account,  credit  freight  with  the  totals  of  their  respective 
columns.  It  will  hereafter  be  explained  that  all  totals  are  recapitulated  in  the 
journal,  and  that  from  there  they  are  transferred  to  the  general  ledger. 
Freight  items  should  all  be  paid  by  check,  and  all  the  expense  bills  covered 
by  a  check  pinned  together  with  a  slip  attached  bearing  the  date  and  number 
of  the  check,  and  then  filed  in  a  file  with  a  division  for  each  railroad. 

Make  it  a  rule  to  pay  freight  expense  bills  every  Tuesday.  Check  up 
bills  in  the  meantime  and  have  checks  drawn  for  each  railroad  ready  for 
collectors  when  they  call.  Post  the  total  of  each  bunch  of  expense  bills  to 
freight  account,  using  for  an  explanation  in  the  ledger  the  R.  R.  initials  and 
checks  number. 

17 


Form  No.  7  is  the  Journal  Cash  Book,  and  I  believe  needs  no  special 
explanation.  Its  use  will  be  principally  to  record  the  daily  cash  receipts 
and  for  the  closing  entries  each  month.  At  the  end  of  each  month  we  will 
gather  the  totals  from  the  sales  binders,  credit  memorandum  binder,  check 


dOUDNAL    CASH     BOOr^ 


■^ 

■ 

Qerr\arke> 

Customer* 

Date 

rMa»rne,& 

Towr\ 

afefe. 

De.b.f 

Cred,+ 

CREDIT 

Dis  ttxm 
Collection* 

, 

— 

1 

JOURNAL     CASH 

2>OOK\ 

Ger?.Led<$.Ace"te. 

Creditors 

Sales.  Credit 

lnt  &>  Di*. 

Cask 

Debit 

Credit 

Debit 

Credit 

Time     C 

aeh 

Debit" 

Credit 

Debit 

Credit 

and  purchase  registers  and  recapitulate  them  in  the  journal.  As  each  mail 
brings  remittances  they  are  passed  to  the  cashier  and  cash  discount  or  other 
deductions  investigated  to  ascertain  their  correctness.  Remittances  will  not 
be  entered  immediately,  but  without  separating  the  remittance  letters  from 
the  drafts,  will  hold  them  until  an  hour  or  two  previous  to  the  bank  closing 
hour.  The  entire  lot  should  then  be  arranged  alphabetically  according  to 
the  accounts,  then  separated  in  piles  for  the  different  ledgers,  keeping  them 
in  alphabetical  order,  and  the  whole  lot  entered  at  one  writing,  entering  the 
town  and  state,  as  well  as  the  name  of  account.  After  comparing  deposit 
slip  with  journal  footing,  we  debit  and  credit  cash  and  enter  the  same  amount 
in  the  check  register.  Column  headed  "6  Credit — Dis.  and  Ex.  on  Collec- 
tions," is  a  credit  to  customers,  a  debit  to  regular  Int.  and  Dis.  account. 

Nearly  all  cash  receipts  in  a  wholesale  business  are  in  the  form  of  checks 
or  bank  drafts — very  little  currency — but  all  cash  receipts  to  a  cent,  of  what- 
ever nature,  shall  be  deposited  in  the  bank  each  day.  Cash  sales  for  one  day 
are  held  till  the  following  morning  and  included  in  the  deposit  for  that  day. 
Nearly  all  disbursements  should  be  by  check,  but  for  petty  expense  items, 
for  such  other  items  as  is  more  practical  to  pay  by  currency,  and  to  supply 
the  cashier  with  change,  checks  are  drawn  to  his  order  and  charged  to  an 
account  with  him  in  the  private  or  general  ledger.     He  takes  vouchers  for 


18 


all  disbursements  and  carries  them  as  cash  items  to  the  end  of  the  week,  or 
month  perhaps,  at  which  time  he  numbers  and  lists  them  according  to  the 
dates  and  turns  them  in  for  credit,  after  having  them  OK'd  by  some  member 
of  the  firm.  General  expense  items  are  charged  to  that  account  in  total, 
other  items  in  detail  to  their  respective  accounts,  and  the  cashier  credited 
with  the  grand  total.  A  cash  column  in  our  journal  is  in  fact  not  a  necessity, 
for  the  cashier  will  keep  a  blotter  in  which  he  enters  in  detail  petty  disburse- 
ments, and  cash  sale  items  from  salesmens'  cash  return  slips. 

Our  general  ledger  is  the  old  style  bound  book,  double-double  ruling, 
with  good,  wide  explanation  columns.  The  stock  ledger  was  a  common 
form. 

The  idea  in  this  system  has  been  to  eliminate  "blind"  total  from  expense 
accounts.  What  is  meant  by  blind  totals  is  the  footings  of  expense  columns 
in  a  journal  or  cash  book  for  a  month;  footings  that  are  made  up  of  many, 
many  items.  An  expense  account — and  I  do  not  mean  general  expenses 
only,  but  traveling  expenses,  freight,  insurance,  etc. — cannot  be  dissected 
without  blundering  through  four  or  five  hundred  pages  of  a  journal  and  cash 
book,  and  several,  perhaps.  While  by  our  method  the  general  expense 
account  will  show  a  total  of  petty  expense  disbursements,  it  bears  a  reference 
which  directs  us  to  the  cashier's  approved  vouchers  for  a  certain  month. 
Our  insurance  account  shows  each  separate  insurance  bill,  the  name  of  agent 
or  company,  number  of  check  that  paid  it,  on  the  back  of  which  is  a  state- 
ment showing  policy  No.,  etc.  The  same  scheme  should  be  carried  out 
through  all  expense  accounts,  thus  making  an  audit  of  bills  and  an  examina- 
tion of  the  books  a  more  simple  matter  than  is  usually  the  case  in  many 
business  houses. 

To  make  an  audit  of  bills  and  an  examination  of  purchase  accounts, 
a  simple  matter,  we  will  adopt  the  numerical  system  of  filing  invoices. 
The  plan  includes  the  use  of  the  letter  file,  or  transfer  cases,  with  numerically 
arranged  indexes.  Each  account  is  assigned  a  separate  division  and  the 
number  of  this  division  entered  on  the  ledger  page  of  that  account.  Thus, 
your  ledger  becomes  the  index  to  the  invoice  file. 

If  the  buyer  should  desire  to  refer  very  frequently  to  the  filed  invoices 
and  it  should  not  be  convenient  to  come  to  the  book-keeping  department  for 
the  file  numbers,  he  can  easily  be  supplied  with  a  small  book  index,  which  he 
can  keep  in  his  desk,  and  as  new  accounts  are  opened  the  names  added  to  his 
index. 

In  this  method  we  have  a  close  second  to  the  voucher  system  of  handling 
invoices,  and  does  away  with  much  of  the  labor  required  by  the  latter  method. 
As  mentioned  heretofore,  each  invoice,  or  bunch  of  invoices  paid  at  one  time, 
bears  the  date  of  settlement  and  check  number. 

19 


ANNUAL  FINANCIAL  STATEMENT. 
RESOURCES. 

Debit.  Credit. 

Accounts  Receivable   $242,463  9° 

Notes  Receivable   4-683  87 

Stocks  and  Bonds 10,000  00 

Cash  in  First  Nat.  Bank 26,369  40 

Cashier's   Cash 242  06 

Furniture  and  Fixtures 6,000  00 

Accrued  Interest  on  Notes  Rec 262  00 

Merchandise  Inventory    210,325  40        $500,346  63 

LIABILITIES. 
Accounts   Payable    680  63 

Present  worth,  Dec.  31,   1901 499,666  13 

GAINS. 

Sales,    net    644,71446 

Purchases,  net  642,624  20 

Freight  added  36,526  40 

679,150  60 
(Less  Inventory  210,325  40  468,825  20 

175,889  26 
EXPENSES  AND  LOSS  ITEMS. 

Rent   10,000  00 

Insurance  3,7^7  90 

Officers'  Salaries 18,000  00 

Salaries  of  Office  Employees 24,462  08 

Salesmen's  Salaries 18,000  00 

Salesmen's  Traveling  Expenses 16,63845 

General   Expense    3MI7  93 

City   Delivery   Expense 1,494  65 

Profit  and  Loss   (bad  debts) 2,44212  126,22313 

Net  Gain,  year  ending  Dec.  31,  1901 49,666  13 

TWENTIETH  CENTURY  GROCERY  CO. 

Capital    paid   in 450,000  00 

Net  Gain   49.666  13 

Present   Worth    499,666  13 

DISPOSITION  OF  GAIN. 

Gain  49,666  13 

Dividend,  10  per  cent 45.000  00 

Surplus  Fund  4-666  13 

$  40.666  13  49,666  13 

Our  credit  memorandum  "returns"  are  similar  in  form  to  our  order 
blanks,  but  of  different  colored  paper.     All  rebates,  allowances  for  short- 

20 


ages,  etc.,  shall  not  be  credited  to  accounts  in  sales  ledgers  except  they  come 
from  these  slips,  which  shall  be  OK'd  by  the  credit  man  or  member  of  firm. 

Traveling  men  are  credited  with  their  salary  each  month,  and  paid  by 
check  as  the)  make  requisition.  A  separate  traveling  expense  account  is 
kept  with  each  traveler.  They  use  the  "common  sense"  weekly  expense 
books,  and  the  total  expenses  of  each  man  for  a  month,  as  shown  by  these 
books,  is  credited  to  his  traveling  expense  account,  using  as  an  explanation 
the  dates  of  the  weekly  books.  Traveling  expense  is  debited,  using  as  an 
explanation  for  each  amount  the  name  of  traveler. 

Railroad  shipping  receipt  books  were  the  duplicate  form,  bound,  and 
a  separate  book  for  each  road,  the  name  printed  on  top  cover  and  back 
edge.  The  name  of  road  and  barrels,  boxes,  kegs,  sacks,  etc.,  printed  in 
the  form. 

Office  and  warehouse  employes  were  paid  once  a  week  in  currency,  a 
check  being  drawn  for  amount  of  pay  roll  and  the  money  put  in  envelopes. 

The  annual  sales  of  a  wholesale  business  may  be  $100,000,  or  perhaps 
less — they  might  be  1,000,000  a  year  or  more.  A  system  of  book-keeping 
for  the  former  would  be  somewhat  different  in  its  details  from  a  system 
designed  for  a  business  of  the  latter  proportions.  The  foregoing  outline 
is  suitable  for  a  business  employing  about  ten  or  fifteen  salesmen,  with 
annual  sales  amounting  to  from  $500,000  to  $750,000. 

The  system  of  accounting  here  described  is  intended  for  a  wholesale 
hardware  company  carrying  all  lines  of  shelf  goods,  also  a  stock  of  yard 
goods  and  implements.  Doing  all  their  own  cartage  to  and  from  yards 
and  warehouses,  they  employ  considerable  unskilled  labor. 

The  system  is  designed  to  give  the  management  each  month  j>rompt 
and  accurate  statements  of  the  business  done  and  expenses  incurred,  as  well 
as  to  show  each  month  the  actual  position  of  the  company  as  regards  assets 
and  liabilities,  and  the  profit  and  loss  on  the  sales  of  each  department ;  also 
to  clearly  indicate  the  cause  of  any  sudden  or  abnormal  change  in  the  con- 
dition of  affairs  from  time  to  time. 

For  our  present  purpose  we  will  assume  the  business  is  divided  into  the 
following  seven  departments.  The  first  four  we  will  call  stock  and  the 
others  operating  departments : 

A — Shelf  Goods.  F — Shipping  and  Receiving. 

B — Warehouse  Goods.  G — Stable  and  Yards. 

C— Yard  Goods.  H— Office. 
D — Implements. 

At  the  outset  it  may  be  well  to  note  the  difference  between  stores  and 
stock  and  between  wages  and  salaries  as  the  terms  are  hereafter  used.  Stores 
we  assume  to  represent  all  material  except  stationery  and  fuel,  intended  for 
the  actual  use  of  the  company.  Stock  represents  material  and  goods  ready 
for  sale  and  delivery.  Transfers  of  one  to  the  other  are  provided  for  by 
means  of  "working  orders."  The  difference  between  wages  and  salaries 
is  that  the  former  represents  payment  to  those  whose  services  are  valued  by 

21 


the  clay  or  hour,  and  who  are  required  by  time  tickets  or  other  means  to 
report  upon  what  work  or  class  of  work  their  time  has  been  expended. 
Salary  is  the  payment  made  for  an  employe's  time  in  bulk  and  to  a  much 
greater  extent  than  wages  is  supposed  to  insure  his  sympathy  and  interest, 
as  well  as  his  efforts,  for  the  best  interests  of  his  employer. 

The  time  of  all  employes  is  recorded  by  themselves  by  means  of  a  time 
register  clock.  The  time  clerk  enters  the  time  as  shown  by  the  clock  each 
day  in  a  time  wages  book  for  employes  paid  wages  and  in  a  time  record  book 


roa~    , 

TIME 

WAGES'  BOOrt ■  1-IAL.F  MONTM 

ENDING. 



No 

N^mc 

TotaJ 

Ti'm.e 

Rate 

W^e&Duc 

Rcrna  n  Ka 

Nlote:~      Waios    be  "mas     pa.'d  "fw.'w   a  monft,*ier>e  are  spaces. 
allSSvcd    for.      I-S   ds.yS>. 

for  all  others.  It  is  his  duty  to  see  that  all  the  time  entered  in  the  time 
\\  ages  book  each  day,  and  paid  for  twice  a  month,  is  accounted  for  by  a  time 
card  showing  to  which  of  the  various  working  orders  the  time  is  to  be 
charged.     He  then  extends  the  time  for  each  order  at  the  employe's  rate 


ron~ 

TIME  PtECOFiD  BOOK  • 

f-IAUE  MOMTt-1 

ENDING 

Mo 

Nam& 

Tme          l_o.e>+- 

Tirne 

To-tal 
Loat 

At 

RemapK*' 

A/ot^  :~  •  Rrncenfecj-e    of  Ifrpe     lo*i~   by    saUpJ«d     cmployece 

per  hour  and  posts  it  to  the  working  order  cash  sheets.  Material  used  upon 
such  orders  is  charged  out  to  them  by  means  of  charge  slips  made  out  by  those 
responsible  for  the  various  stores.  These  slips  often  being  priced  and 
extended,  are  also  entered  upon  the  cost  sheet  of  the  order  upon  which  they 


rv.p+- 

TIMS     CAyFtO 

WopKmaa 

Rate,   pen  day 

Or-de^No 

Mi»*. 

Mia. 

Pi<=.rr^r?>Ka 

FWfed 

V* 

,         * 

are  issued,  any  surplus  material  being  returned  to  stores  and  credited  to  the 
order  upon  which  it  was  drawn  by  means  of  credit  slips.  These  credits  are 
entered  on  the  cost  sheets  in  red  ink  and  deducted  from  the  gross  charges 


when  the  latter  are  totaled  up  at  the  end  of  each  month.  The  time  record 
book  is  merely  for  the  information  of  the  officers  of  the  company  as  to  the 
regularity  or  otherwise  of  employes. 

WOPiniNG     OQDSO  COST  <5t1£ET                                          r°*>~  a 
Dai TVj0 

Wopdiaci    oV     Orsclcre 


C-U&&  of  Account"                                                                            Account 

Mafe.al 

Wag—- 

Qoaotrty 

Ar.-fele 

P^.ce 

5fer,=  & 

5fecK 

fl.I 

fe=d 

at-av 

M.sci). 

r^io 

Nama 

Time  In  Voice 

Exfensior, 

/ 

/ 

For  the  purpose  of  keeping  distinct  the  expenses  of  the  various  depart- 
ments orders  are  issued  from  time  to  time  to  the  heads  of  each  department 
specifying  what  shall  be  charged  to  such  order  and  also  the  account  to  which 
the  cost  of  such  order  shall  ultimately  be  posted.     These  orders  cover  the 


WOQHING    OQDELO  CrtAJ=lGE.  SL-I& 


1   H^\/«.     *+Ki.»     d-ay    \-£>&u^.<i    4fT<a,     Yo'lovvir^     msTTe-r^ic^l      on    actoun 

I^Ir, 

+    above      Mo. 

C^oarxfi'-fy 

Ar^Tole 

Pr.l?e 

Value- 

expenditure  of  wages  and  material  only,  all  other  charges  for  similar  classes 
of  expenses  being  distributed  to  the  various  accounts  by  means  of  transfer 
entries.  These  orders  are  called  working  orders,  as  distinguished  from 
purchase  and  shipping  orders,  and  though  virtually  issued  by  the  manager, 


WOQMNG    ORDER   CFt.SL.lP 


1  hav«  tH'is 

day    r=e 

ceived   -tH=  ?ollow"in^    rTV2>"tS.p>'isl 

No 

oaaccounlaLove  INo 

OuaKTi'Hy 

A*  r=TTo  1  e. 

Pp'ici 

Valu* 

Signed 

the  accountant,  what  accounting  they  shall  bear.  Though  they  have  the 
same  number  all  year,  the  cost  sheets  are  closed  out  each  month,  the  amounts 
thereon  posted  to  debit  of  the  correct  account  and  credit  of  wages  and  stores 
and  new  sheets  opened  for  the  following  month.     The  total  debit  to  these 


23 


various  amounts  for  wages  should  of  course  exactly  balance  the  wages  pay 
roll  for  that  month,  and  the  total  stores  charged  out  will,  if  correct  entry  of  all 
charges  has  been  made,  show  the  exact  amount  of  material  used  by  the  com- 
pany for  a  given  time. 

the  m.p.co.Lt'd.  ^tandino  woonrna  pctbER  /-<_«'-., 

ChA^S,* -fe -m;»   omler  all       \  Mo.  .O    1.4 _, 

w^3«r.£>  £*■  f^Iarter>ial   u&*A  fore  J 

NoiS:-   .Specify   fully,  nafcjrse  ofexpenst  cove  pod     iy 


ClaeiofAc 


.A.  ttou  r\.+" 


"lb                                                              Depf.                                  •5$^-                                                    Acct, 
RemapRs; , __ . , __ , 


As  regards  such  special  work  as  will  not  be  continued  from  month  to 
month,  special  orders  are  issued  and  follow  the  same  course,  except  that  they 

Tt-t£   M.O.CO..L.-TD..  <SP£<ZIAL-    WOOM/MG    OGOSQ                                      mv  w. 
ThU   cp<Jen    auitnowzcsl  Mo.    Cl,AO\ 


lHi\&~or=>d 


/  '  AVo7fe  .' —      Speo'fV     fc_))v-  wopK  "+o  be-  cJorje     oncier- 


Re-fcjorx    to   Office    when 

=  orr\ple.ted 

Claea    of  Accour\+ 

Ac.coi_.r-d- 

"To                                                  De.p 

h                                 -Sg'd.. 

Acdr 

f=L,r.r,''*kod                       !?wt>. 

^S/pnafune    of  head  of£)c/ 

it 

are  returned  to  the  office  as  soon  as  completed  and  the  cost  made  up  and 
put  on  record.     If  the  expense  of  a  working  order  is  chargeable  to  any  one 

~~a  THE.    M.G.CO.LT'O.  CIT-Y  PURCHASE  OCID£R 


RO,  t\&9 
wo.  n<-+e- 
-S>.0.    r\o+e^ 


Plca-ae.    delis/e-ra  wi"ff-i   invoice 

( /VoTe.  -  TKcae.   numbens  _s>e    filled  ia  !f<joode. 
for>aWof»Kind   or»  v_>hi'ppin<3    Or*_er»  ) 


^  +_  TKo  M.D.Co.Ltd 

Date. 


un 


^^  .'-Invoices  for>  Tfie    above       canaof    be     paa«e.d    +£>     youra  croedif" 
'e»e>    ir  beopo.     "tt^e.     above     nurnbeP0- 


:.r->.s> 


department  it  bears  as  a  prefix  to  the  number  the  initial  letter  of  that  depart- 
ment. If  it  is  a  general  expense  covering  more  than  one  department  the 
number  bears  the  prefix  "M." 

24 


Stores  and  stock  are  purchased  by  the  chief  stock-keeper.  All  pur- 
chase orders,  however,  with  the  exception  of  those  calling  for  goods  required 
for  immediate  shipment  to  a  customer  must  be  initialed  by  the  manager 
before  being  sent  out.  Orders  for  repairs  or  work  to  be  done  by  outsiders 
are  subject  to  the  same  rule.     The  stock-keeper  is  largely  guided  in  his 


roar*  <3.  A 


T/7£  M  «  CO., t-TD. 


.^-r-TEC)   F>UI=tC.nA3E    OPlDEPi 


<f=.0.  IS77 
w.o.  rsotfe 
1  s.o.  r-iotfe- 


Ple<=.s.c    £>kit 


.fellc 


(/Wo/c  ■'—    Theae  nc-<rnb<=T»-»  <snc  filioJ    \r\\f 
or>a  -SHippin<J    Or>dcr»  ) 


purchases  by  information  given  him  by  the  salesmen  of  the  stock  depart- 
ments, who  are  expected  to  promptly  notify  him  of  any  lines  they  might  think 
it  advisable  to  order.  He  also  keeps  a  close  watch  upon  stock  ledgers  of 
the  various  departments. 

In  the  event  of  the  order  clerk  requiring  the  purchase  of  goods  for  a 
customer's  order,  he  draws  a  requisition  upon  the  stock-keeper  for  what  he 

fO/=>M  Q  AiEOUI-SrriON  f=op>  P>UDCHA^S£   Of=  MATE&IAL. 

To   Oklttf    Siook  ^eepep  D-aTfe— 


If   approved,   pleag><=      pur>cha.se    f^ora   Dgpt".. 


»«.'tsi!c 


*3jgnrt 


J 


requires.  The  head  of  each  operating  department  needing  supplies  also 
requisitions  for  what  is  required.  By  this  means  all  the  buying  is  done  by 
one  man  (subject  to  the  approval  of  the  manager),  which  in  actual  practice 
is  invariably  found  to  be  the  b  st  plan.  These  requisitions  for  purchases  are 
bound  in  books  of  ioo  each,  numbered  in  duplicate  and  the  first  sheet  of  each 
number  perforated  for  removal.     The  party  requiring  goods  thus  has  a 


foar* 

/o 
■fe. 

TRAVEL-EDS 

oaotsFt 

OATfe. 

/Vo 

Tervn.a 

O.n.forfreJi'-i- 

Mo 

Ar 

o+7^l^ 

Ouooti ¥y 

Ppicc 

Rema 

r»K.& 

/ 

copy  of  what  he  has  requisitioned  for  and  thus  avoids  the  frequent  error  of 
asking  for  the  same  goods  twice. 

Immediately  upon  the  receipt  of  goods  the  invoice  is  checked  and  handed 
to  office  to  pass  to  credit  of  supplies.  If  they  were  purchased  specially 
for  a  customer's  order  they  are  sent  to  the  shipping  room  and  the  order 


25 


clerk  advised  of  their  receipt.  If  they  were  for  a  working  order  they  are 
delivered  to  the  party  having  charge  of  the  work  called  for  by  such  order 
and  charged  out  by  means  of  a  charge  slip  as  described  above. 

The  travelers  are  provided  with  triplicate  order  books,  one  copy  being 
left  with  the  customer,  one  remaining  in  the  traveler's  book,  and  the  original 

roan n  QEPT.  SHIPPING  OGOC& 

To..._ Mo.:-;_.._; 

5tocK  Dept 

The  Onden  of  #>.'=»  No  oalb.fonltTe.  following  jgooda.     Tf*om  your*    De-pb 

1      ■Select'  ifcem.  and  Send  wTttnlfti.e.  onden  "fe    ^K.pprr^    »oom 
'"'"   aTonee-  ^    pne.paPc  for>  ^kiprnen.1~  -     fill   in.  we^nfe.o^  ^uercti+i'es.  -  OhecK 

sff     Hem-e.      neady    and    ^.end   ^fi\s,    opdep  -to  ^ippin4    cJer=>r\, 


Yoo 


dv 


;PP^ 


Ndfe 


Cheek 


V 


Ar^.-ol. 


•  I.  "Tj-iio    fbr>  ^ucK  3>o 

la  -s>h"ipP'nj§    Poom 

2.Thi\s      for*    -suck  _^ 

Ji'pecT    fr=>orn,    ^>l< 


PeaJv  for>  ssHtpn-venT 


ir\i  pped 


Wej^Kt-oo 
Quantity 


d,s  ^e.  .an*  , 
Dod& 


cK  d< 


.Sold 


O  o>.s~l 


"to  be     p 


nd  noT 


rtK 


P 

adv| 


too  >=.)- 

*$«     be 
h' 


'1T£* 


Booirv. 


being  forwarded  to  the  house.  On  receipt  of  either  a  traveler's  or  letter 
order  from  a  customer,  or  of  an  order  by  telephone  or  wire,  it  is  entered 
in  the  order  register  and  given  the  first  blank  number.  The  order  clerk 
then  makes  out  out  department  shipping  orders  (in  the  case  of  all  orders 
except  travelers'  he  previously  enters  them  upon  forms  similar  to  travelers' 
orders),  and  sends  the  main  orders  to  the  shipping  clerk.  The  department 
shipping  orders,  which  bear  the  same  number  as  the  main  order  from  which 


font*  izt 

The    N' 

7var  mg.co.istd.  voucrrea 

,U.Co,  L_+c).                                                                           To 

Jf-J 

a 

Creclif- 

Debit 

l            C.roeJjf-'fHc   above 

DcLt 

3jgn<-.d_ 


they  were  drawn  (  and  also  the  letter  of  the  department)  are  sent  to  the 
various  salesmen  in  each  department.  The  goods  are  laid  out  for  shipment 
and  in  the  case  of  small  goods  are  sent  to  the  shipping  room.  As  regards 
heavy  goods,  the  weights  and  quantities  are  filled  in,  a  check  mark  put  in  the 
column  opposite  each  line  that  is  ready  for  shipment,  and  the  department 
orders  then  sent  to  the  shipper.  As  soon  as  he  has  the  various  goods  shipped 
he  puts  a  plain  cross  mark  on  the  check  mark,  which  now  shows  that  the 
different  lines  are  actually  in  carriers'  hands.     Before  shipping  the  depart- 


26 


ment  orders  are  compared  with  the  main  order  of  the  same  number.  They 
are'  then  all  handed  to  the  invoice  clerk.  The  main  orders  are  filed  away  and 
the  day  book  entry  made  from  the  department  orders.  These  orders  having 
been  priced  and  extended,  the  invoice  is  made  out  and  customer  billed  by 
means  of  a  loose-leaf  system.  By  this  system  the  invoice  and  day  book  are 
written  at  the  same  time,  by  means  of  chemical  paper.  The  invoice  is  then 
detached,  leaving  the  duplicate,  which  is  virtually  a  page  of  the  day  book, 
ready  to  file  upon  a  binder  for  which  it  is  already  perforated.  On  the  fact  of  it 
it  appears  as  though  only  one  entry  could  be  made  on  a  page  of  the  day  book. 


The     M.  Pl.Co.L/tcJ.,        PuACHA.SE3      fc.r=>  Mon* 

•  of 

*=» 

VoucKe.  r= 

On«=d,4- 

De.fc.H~ 

Name, 

AinourvT 

A/oTk:—  This  b 

"*- 

-da. 

r\s>  or 

.e-cek'.+  c 

oL 

-no.    f!>r» 

t-acK 

G-ol.LeJ, 

--. 

This  is  overcome  by  having  various  sized  invoices  and  so  arranged  that 
either  one,  two,  three  or  four  invoices  will  be  on  a  page.  This  system, 
besides  the  saving  of  time  for  the  invoice  clerk,  has  the  added  advantage  of 
enabling  the  ledger-keeper  to  keep  his  books  posted  right  up  to  date.  The 
invoice  clerk  using  only  the  pages  of  the  day  book  containing  that  day's  entries 
there  is  no  delay  when  other  employes  require  the  day  book.  The  cost 
column  having  been  filled  in  in  the  department  orders,  they  are  filed  away 
on  binders.  The  amounts  on  each  order  or  of  each  entry  in  the  day  book 
are  not  added,  but  at  the  end  of  the  month  they  are  taken  off  on  total  sheets. 


The    M'.R.O< 


Ltd 


THE  M.OCO.LTD,  TP>AN3f^EP    ENTRY 


The  total  sheets  for  the  day  book  will  show  the  total  amount  charged  to  cus- 
tomers during  that  month,  divided  into  city  and  country  amounts.  The 
total  sheets  of  the  order  binder  will  show  the  same  grand  total,  but  this 
sum  will  be  divided  among  and  show  the  amount  of  the  sales  from  the 
various  departments.  This  will  be  seen  to  be  a  check  not  only  upon  the 
additions  in  the  day  book,  but  will  also  go  far  to  prevent  the  chance  of  any 
shipment  being  made  and  not  duly  billed  to  the  customer.  In  addition  to 
this  the  total  sheets  of  the  order  binder  show  the  cost  of  each  sale  in  each 


27 


department.  The  information  to  be  had  from  these  two  books,  taken  in 
conjunction  with  the  expense  accounts  of  each  department,  enables  the 
management  from  month  to  month  to  make  accurate  comparisons  not  only 
of  the  expenses,  sales  and  profits  of  each  department,  but  what  in  many  cases 
may  be  found  even  more  valuable  to  compare  the  percentage  such  expenses, 
sales  and  profits  bear  to  one  another,  as  well  as  to  those  of  other  departments. 

Credits  to  customers  are  made  only  upon  the  authority  of  a  credit  for 
returns  signed  by  the  stock-keeper,  or  a  credit  man's  signed  by  the  secretary- 
treasurer.  These  forms  are  treated  by  the  invoice  clerk  exactly  as  the 
department  shipping  orders  and  filed  in  a  similar  binder  called  "credit  binder." 
The  credit  book  is  on  exactly  the  same  principle  as  the  day  book,  already 
described. 

The  cash  book  is  ruled  to  keep  distinct  cash  received  or  paid  out  for 
accounts  in  the  various  ledgers.  The  amounts  in  the  three  columns  bearing 
the  names  of  the  ledgers  are  posted  in  detail  to  such  ledgers  and  at  the  close 
of  the  month  the  totals  of  the  other  two  columns  are  posted  to  the  accounts 
bearing  the  names  of  the  other  ledgers. 

fOGM   lis  TflAlsl.SF'E.n    £NTflY  &OOK 

/The    M.  R.Co.  Ltd..     T"aAN.2>F=EF=i  Entdies,  MontKof is> 


Cr^dlt- 


Account" 


Amo  urrj- 


/  /ois  :-  TKIe.  booH 


rife 


coolains 


del  >TT~  ccli 


"5or=  each  GenLed^, 


Supplies  accounts  are  credited  by  means  of  a  voucher  which  is  entered 
in  a  purchase  book.  To  this  voucher  are  attached  the  various  invoices  which 
it  is  desired  to  pass  to  the  credit  of  supplies  account.  The  face  of  the  voucher 
only  shows  the  total  amount  to  credit  and  the  debit  to  the  various  main 
accounts,  to  each  of  which  a  column  in  the  purchase  book  is  allotted. 

The  ledgers  used  are : 

Ledger  A — Accounts  Collectable. 
Ledger  B — Accounts  Payable. 
Ledger  C — General. 

The  two  former  are  ordinary  loose-leaf  ledgers  of  any  of  the  modern 
pattern.  The  names  of  ledgers  A  and  B  are  sufficient  indication  of  the 
class  of  accounts  they  contain.  In  addition  to  such  accounts,  they  carry 
each  two  adjustment  accounts,  bearing  respectively  the  names  of  the  other 
two  ledgers.  This  renders  them,  as  far  as  commercial  and  book-keeping 
use  is  concerned,  each  independent  and  capable  of  proof  by  balance  without 
reference  to  the  other  ledgers. 

The  general  ledger  is  a  locked  ledger  in  which  all  the  internal  or  work- 
ing accounts  of  the  company  are  kept,  and  also  two  accounts  called  respec- 


ts 


tively  accounts  collectable  and  accounts  payable.  Ledgers  A  and  B  are  aS 
a  matter  of  fact  only  details  of  the  accounts  of  similar  name  in  the  general 
ledger,  and  as  their  names  denote,  are  used  exclusively  for  the  accounts  of 
the  debtors  and  creditors  of  the  company.  It  is  of  course  with  the  general 
ledger  that  we  have  now  to  deal. 

The  general  ledger  accounts  are  divided  into  groups,  a  number  of  blank 
pages  being  left  between  each  group  on  which  to  open  new  accounts  which 
may  be  decided  upon  from  time  to  time.  The  accompanying  "list  of 
accounts"  is  in  the  nature  of  a  suggestion  only,  as  the  actual  accounts  required 
for  any  one  business  must  be  decided  by  those  best  acquainted  with  the  cir- 
cumstances. They  cannot  be  based  upon  a  list  which  has  given  proof 
of  efficiency  and  good  judgment  under  what  appear  to  be  similar  circum- 
stances and  surroundings.  If  there  were  many  departments  it  would  be 
well  to  have  the  accounts  in  the  general  ledger  opened  only  under  the  heading 
of  each  group,  a  class  of  account,  and  by  means  of  a  subsidiary  ledger  divide 
such  main  account  into  as  many  sub-accounts  as  might  be  found  desirable. 

Dale. pcn>. 

Afe^.'-'On   Invoice  <or>   above    ^oods    and   iriall  cor>Responder>ce,  pe^andinA 
"Tri<^>    opder»     p'ea&e     ouolc.    above      ni-irrvber».s>. 

D<rTb~fch  e*1~   This    hnc  &ncf  neztZjr^rt   73  u-s' 
AC/-WOKV L./ZDGG/W£/VT~  Or  OfZDE.Pt 
. ,  .  (  F>.  O .  I  Z,T7 

Thn    M.R.Co.L.m..  NO. 


•s.o. 


R  cTerarojrvg    1o  youp  opdep  bear»iri^      above.    nuTlkena,    we    be^ 


"te  £> 


D<a+£ sS^n&d. --. 

At  the  close  of  each  month  the  accountant  is  supplied  with  a  transfer 
entry  crediting  wages  and  material  accounts  with  the  expenditure  upon 
working  orders  and  charging  the  account  named  upon  such  working  order. 
Where  two  or  more  working  orders  are  chargeable  to  the  same  account  the 
costs  are  grouped  together  and  charged  out  by  the  one  transfer  entry.  The 
amount  credited  to  wages  should  of  course  wipe  out  the  amount  paid  out 
for  wages  by  the  secretary-treasurer  during  the  month.  By  a  similar  trans- 
fer entry  salary  account  is  wiped  out  and  distributed  among  the  various 
expense  accounts  in  the  proportion  decided  upon  by  the  management.  No 
amounts  being  posted  to  the  general  ledger  except  from  the  cash  book  and 
transfer  entry  book,  it  is  necessary  to  make  each  month  transfer  entries  for 
all  transactions  affecting  the  internal  accounts  of  the  company.  These 
transfer  entries  are  then  entered  in  the  transfer  entry  book  and  posted  to  the 
credit  of  the  various  accounts  and  the  total  of  each  column  posted  to  the 
debit  Oi'  the  account  whose  name  it  bears.     The  total  of  accounts  collectable 

29 


and  payable  in  the  cash  book  having  been  posted  to  these  accounts,  it  will 
now  be  seen  that  a  trial  balance  sheet  of  the  general  ledger  is  in  itself  a  very 
complete  statement  of  the  affairs  of  the  company.  I  f  from  this  trial  balance 
a  statement  is  taken  off  each  month  showing  the  total  debits  and  credits  to  each 
account  for  the  month  and  the  excess  of  one  over  the  other,  a  very  valuable 
subject  for  thought  and  study  on  the  part  of  the  management  is  presented. 
The  sales  account  being  charged  with  the  costs  and  credited  with  the  selling 
value  of  stock  sold  will  of  course  show  not  only  the  amount  of  sales  but  the 


f^JOTC  A. 


l./S>T  Of   GEMEBAU    UEDG£F>    ACCOUr^T^ 


Group      on      Ola-s* 


N/l«ainIti>>rie,nc-<£.    Acc-rf^1 


r-l<3.-r,<=     of    Accounf. 
Wauehousea 

S*ta»b)<=-       Eoc_.iprrve.rd- 
FL.r=nl'fcf=>e.      <£»-  F^i'xlTJ  r=e<s 
R<ep_»ir=.&     -fa     Wai=e.hou^.«« 

~Tc>ol.e>      <£•  I  rrv  pi  imcnfe 

-^Stable      Eou'ipmeal". 


E  •<  pen&d 


Ac_c-4s> 


M  •£-+&.  rai'e.  I       A' 


C2.om.n-y: 


J     Accde, 


(vl, 


a 
r—i 

•I.  Open 


,^    E: 


cpeo-i 


Office     E 

Re-nt~.  Taxes      <£^  I  r\.& 
Tpav.    Cxpe 
Lejgal     E.xp. 
Genenal    E,: 

■S>"fcahor->«r 

~Tn__^c_Ie;r=r.£.       -S>_3rr-ip]<s.£> 

=d,napy 
»rrv  on  cor=po 
Returns    a 


•x 


All      Ihe 

ofafii 
Acct" 


rfe, 


commepcial     sc,crj 
>atior\    and    al&o,>5al«9 
d     Allow.anc-ei.s.-Accitai, 


ble.~A.nd   Accfe,   Colleclabl 


MaiePi< 


N07-e 
C=.«. 

Wagea 

Sala^ie.*  (_ 

•3^le..»  Accounfe 
Accfe  <_o|»  . 

StecK 

R«_"tTjr=n-s.    ^/Allowances 
Accte.Coll. 


L/ar    c5^="   WOA/TW/LV     T/=>ANsr=££*    ewmi£S 


Acdte ,  ^.^ 


-S^nc-ino,     Opc}er=^ 


'*      Secy.Tpeaa.    IMemo. 
Accte. Collectable.     "Total   cKar»cSes  16  customcpS. 
RetOpna     <&-  A  I  low'o.5.  "     cpedfe  &<allowncs  .To  custbmePA 
•2>a>le^2>,  "fofel    co~s\~    oT  Sales. 

SlocK  r=efonn.£» 

Drt>.  Dills.    Rec,   total  of" notes  and  aec'ptnc;-..    frorrv. 


jatomerx 


Pa»ycsU« 


Pay 
Aco+S, 


■>y     Accla  ,    as  p«=r=>    punchaaa      bo<_.r<^, 

profit  made  thereon  at  any  given  time.  The  stock  returns  account  will  of 
course  show  a  loss  of  the  difference  between  the  amount  credited  to  cus- 
tomers for  goods  returned  and  the  actual  value  to  the  company  of  same.  A 
careful  watch  upon  the  accounts  collectable  and  bills  receivable  and  accounts 
payable  and  bills  payable  will  sometimes  give  somewhat  startling  informa- 
tion.    It  is  of  little  use  having  an  efficient  operating  and  selling  organization 


30 


building  up  a  big  business  and  selling-  at  a  fair  profit  if  the  financial  organiza- 
tion fail  to  make  the  best  of  the  favorable  conditions  created  for  them.  It 
is  quite  possible  to  be  making  good  profits  and  have  nothing  to  show  for  them 
except  perhaps  a  larger  stock  and  increased  book  debts,  neither  of  which, 
prehaps,  will  be  found  growing  more  valuable  as  time  passes. 

At  the  close  of  the  fiscal  year  a  physical  inventory  of  stores  and  stock 
is  taken  and  compared  with  the  book  records  of  these  accounts.  Of  course 
there  will  be  a  difference,  but  it  should  only  be  a  slight  one  and  an  adjusting 
entry  should  be  made.  Buildings  and  equipment  should  be  charged  with 
the  rate  of  depreciation  agreed  upon  and  which,  of  course,  has  to  be  decided 
after  a  full  study  of  the  particular  conditions  under  which  the  company 
operate.  All  expense  accounts  closed  out  and  a  balance  sheet  taken  off  in 
the  usual  way.  The  accounts  having  been  treated  as  above  described,  to  all 
intents  and  purposes  the  annual  closing  of  the  books  is  but  very  little  different 
from  the  work  done  each  month.  Though  the  accounts  are  not  actually 
closed  out,  yet  the  statements  furnished  the  management  each  month  amount 
to  about  the  same  thing — and  the  same  information  is  obtainable  from  them 
as  from  an  actual  balance  sheet. 

In  its  essential  features  this  system  is  neither  a  theory  nor  an  experi- 
ment. On  the  face  of  it  it  may  appear  somewhat  complicated ;  in  reality,  it 
is  simplicity  itself.  I  have,  of  course,  omitted  a  description  of  some  of  the 
details,  but  I  would  like  to  say  that  by  means  of  card  and  loose-leaf  systems 
the  information  I  have  spoken  of  may  be  increased  and  added  to,  subdivided 
and  elaborated  to  almost  any  desired  extent.  At  the  same  time  it  is  quite 
possible  by  an  unwise  or  reckless  use  of  these  modern  aids  to  office  work  to 
defeat  the  very  purpose  for  which  they  were  intended  viz.,  the  best  result 
for  the  least  time  and  labor. — K.  Falconer. 


31 


PART  VII 


Retail  Accounting. 


Accounting  for  Various  Classes  of 
the  Retail  Trade* 


OTWITHSTANDING  the  great  advance  made  in  recent  years 

nin  the  science  and  practice  of  accounts,  it  is  only  to  be  expected 
that  in  some  quarters  antiquated  and  clumsy  methods  will  be 
yet  found,  dear  to  the  merchant's  heart  and  the  idol  of  the 
unprogressive  book-keeper's  stiff-necked  fancy.  Useless  con- 
servatism is  not  entirely  indigenous  to  Europe  and  the  Philip- 
pine Islands,  but  nourishes  on  American  soil  right  beneath  the 
flowing  folds  of  the  star-spangled  banner. 

The  book-keeper  for  a  retail  dry  goods  store  once  com- 
plained of  the  overwhelming  amount  of  work  he  was  called 
upon  to  do.  He  had  to  deal  with  a  large  number  of  credit  sales. 
Sales  tickets  were  made  out  in  duplicate,  the  original  handed  to  the  cus- 
tomer, and  the  duplicate  to  the  book-keeper.  From  the  sales  ticket  the 
book-keeper  copied  the  items  into  a  day  book,  and  from  the  day  book 
copied  the  items  into  the  sales  ledger,  this  latter  being  considered  necessary 
because  the  customers  required  an  itemized  monthly  statement.  This 
naturally  leads  to  the  expected  information  that  at  the  close  of  each  month 
the  items  of  each  bill  are  recopied  from  the  ledger  on  the  monthly  state- 
ments. Each  sales  item  is  therefore  recorded  four  times  in  this  up-to-date 
establishment,  and  with  an  average  of  six  hundred  active  accounts  the 
book-keeper's  lot  is  not  so  happy  as  it  might  be. 

While  the  above  is  an  extreme  illustration  of  "how  not  to  do  it,"  there 
is  undoubtedly  a  great  need  for  improvement  in  the  way  in  which  the 
average  retail  merchant  keeps  his  records.  No  one  system  can  possibly  be 
suggested  which  will  answer  all  requirements  and  satisfy  all  conditions, 
but  we  propose  in  this  article  to  describe  the  methods  used  in  a  number 
of  different  businesses,  and  from  these  methods  many  excellent,  labor- 
saving  ideas  may  be  obtained. 

For  general  purposes  a  system  as  described  hereunder  has  been  found 
very  efficient  where  there  are  not  unusual  conditions  to  be  provided 
against,  particularly  in  those  cases  where  customers  demand  monthly 
itemized  statements  of  account.  It  should  be  particularly  noted  that  the 
pass-books  mentioned  are  not  given  to  the  customer,  but  retained  and 
constitute  the  sales-book  of  the  business,  and  all  the  purchases  of  one 


5 


customer  are  assembled  together,  and  for  some  business  these  pass-books 
may  also  constitute  the  customer's  ledger,  with  a  slight  modification  of  the 
system. 

Provide  a  pass-book  for  each  customer. 

Provide  a  suitable  alphabetical  file  for  the  pass-books,  with  vowel  and 
other  indexical  distribution  to  accomplish  instant  reference  to  the  book 
wanted. 

Provide  an  ironclad  ordinance  that  all  pass-books  not  in  use  must  be 
kept  in  the  file. 

Have  the  pass-books  made  in  the  form  of  a  sales  ticket  in  triplicate,  the 
duplicate  and  triplicate  with  perforations  to  allow  of  their  being  detached 
from  the  book. 

When  the  customer  makes  a  purchase  the  salesman  enters  same  in  the 
pass-book  and  hands  the  duplicate  to  the  customer,  retaining  the  pass-book. 

The  book-keeper  posts  the  total  purchases  (not  items)  from  the  pass- 
book original,  and  also  enters  the  account  on  a  sales  recapitulation  sheet  in 
order  to  obtain  his  monthly  total  of  sales. 


p 

°capiTLil<at7br7   S^eef" 

Ouali^ 

No 

I\|<amc  &  /Address 

De-scr»ipfTon 

T<=arr?.s7>n 

ToKet 
No 

|c.O.D. 

Arnourtf 

ch-c^y. 

/ 

/' 

At  the  end  of  the  month  the  book-keeper  makes  his  monthly  statements 
from  the  ledger  and  attaches  to  same  the  triplicate  copies  of  bills  from  the 
pass-books. 

By  adopting  this  plan  all  the  itemizing  necessary  is  done  at  one  writ- 
ing by  the  salesman  who  receives  the  order,  ledger  space  is  not  unneces- 
sarily wasted,  and  the  book-keeper  will  begin  to  have  a  little  time  to  spare 
in  which  to  make  himself  useful  to  his  employers. 

Another  method  is:  Have  large  sized  envelopes  made  with  statement 
form  printed  on  front — debit  and  credit  columns.  Enclose  duplicate  bills 
in  envelopes  and  post  totals  on  statement.  Use  cash  book  with  separate 
columns  for  cash  sales  and  receipts  from  customers  applying  on  account. 
Post  from  cash  book  to  statement. 

File  statements  in  convenient  card-index  file  alphabetically  arranged. 

Enter  amounts  of  charge  sales  each  day  on  "recapitulation"  sheet. 

Use  different  colored  sheets  for  merchandise  credits,  or  allowances,  and 
post  direct  to  statements,  making  recapitulation  as  in  case  of  charge  sales. 

In  small  general  ledger  keep  creditors'  accounts,  expense  accounts,  etc., 
also    representative    account    entitled    "Customers'    Account."      To    this 


6 


account  charge  total  sales  from  recapitulation  sheets,  credit  total  merchan- 
dise returns  and  allowances  and  total  of  special  column  provided  in  cash 
book  for  receipts.  The  balance  of  this  account  will  then  equal  the  aggre- 
gate of  the  balance  shown  on  the  statements  and  so  prove  the  accuracy 
of  the  work. 

This  system  can  be  combined  with  the  one  previously  described — as 
above  suggested — by  filing  the  pass-books  in  the  envelopes. 

The  recapitulation  sheets  above  mentioned  should  be  specially  ruled 
so  that  total  cash  as  well  as  credit  sales  may  be  recorded,  and  so  that  the 
sales  may  be  distributed  over  the  various  departments  to  which  they 
belong. 

The  illustrations  given  below  will  show  a  very  convenient  form  of 
Recapitulation  Sheet  and  Comparative  Record : 


<^/s 


'T-Y 


} 

Gerx.  McJse, 

Groccpics 

Doofe  £/£>koCS 

Dny  QoocL     1  Tc^TzX    <S>aloe> 

C*&k 

o«d,t 

Tolfi 

Cask 

Cpcc),^ 

Total 

Cask 

Cred.t 

Total 

Cask  |Cr«Jit 

XtalJICaoklCpccl.tlTotal 

1 

5 

•75 

365 

9 

lo 

55 

96 

55 

96 

3 

lb 

7 

64 

1! 

39 

24 

05 

30 

70 

M 

61I33 

55 

98 

0)131 

'*-, 

2 
o 
4 

A 

36 

ia:3 

22 

51 

30 

8o 

93 

45 

124 

L'5 

2 

60 

6 

10 

9 

30 

6 

50 

53 

14 

hi: 

64JU4 

28 

17! 

42  21.570 

1 

1 

I 

1 

The  total  yearly  sales  in  each  department  may  be  kept  in  the  same  way 
by  entering  the  total  monthly  sales  instead  of  the  daily  as  shown. 

The  following  is  an  excellent  form  of  departmental  comparative  record, 
trading  account,  and  profit  and  loss  account  combined: 


CxperNse 


D< 


Lr=>~Tfr-?e-o~ti     A 


Gro55  P^of  rJ-* 


Turn  Ovei° 

vSoJJ    Fi>r> 

Gen  Exp.pepcerj,- 
1^.oa'tZipr?ovep  )  l°A> 
Nlet    Ppofif- 


I965 


2oo  1 
324o 


IS  I 

6I3 


ArO 


i33 


\rre>z> 

3S2 


^ 


A  subscriber  to  The  Book-Keeper  describes  a  similar  system  as  follows: 
The  Original  Entry  Ledger  System. 

A  convenient  itemized  ledger  is  something  desired  by  a  large  majority 
of  small  retail  dealers,  in  which  they  can  make  the  original  charges  without 

7 


the  intervention  of  the  journal.  There  is  no  reason  why  a  person  il  account 
should  not  be  itemized  on  the  ledger  rather  than  on  the  journal  if  the  work 
can  be  done  as  quickly  and  as  conveniently.  The  loose  leaf  system  sug- 
gested the  plan.  I  adopted  the  Yonker  statements,  double  ruled  and  filed 
them  in  binders.  It  is  only  the  work  of  an  instant  to  put  in  or  take  out 
a  new  leaf  from  any  part  of  the  volume.  Indexed  sheets  were  used  to 
keep  the  accounts  under  the  several  letters  of  the  alphabet,  but  in  separate 
groups.  This  arrangement  enabled  me  to  turn  to  an  account  more  quickly 
than  I  could  in  the  ledger,  if  I  had  to  refer  to  the  index.  I  used  several 
binders  to  accommodate  the  business,  subdividing  the  accounts  both  accord- 
ing to  the  alphabet  and  territorially.  This  plan  enabled  me  to  make  the 
charges  to  the  personal  account  as  soon  as  the  charge  tickets  were  handed 
in.  Then  accounts  were  always  written  up  and  always  ready  for  the 
customer.  Whereas,  under  the  old  plan,  it  was  impossible  to  be  less  than 
twenty-four  hours  late.  I  made  the  charges  to  the  several  accounts  about 
as  quickly  as  I  could  write  the  items  in  the  journal.  The  items  of  an 
account  were  always  grouped  together,  and  when  I  came  to  enter  them  on 
the  customers'  pass-book  (which  it  was  necessary  to  do  in  almost  all  cases), 
it  was  the  mere  act  of  copying,  and  did  not  involve  a  search  through  many 
pages  of  the  journal.  As  the  pages  were  filled,  new  pages  were  added  and 
the  completed  pages  were  removd  and  placed  in  convenient  files. 

System  for  Bakeries  and  Creameries. 

For  retail  businesses  where  deliveries  are  made  daily,  and  accounts  are 
paid  weekly  or  monthly,  there  is  nothing  superior  to  the  tabular  plan  of 
record  as  shown  below  combining  the  features  of  sales  book  and  sales 
ledger,  arranged  for  days,  with  balance  column  to  carry  forward  unpaid 
balances  from  week  to  week. 

Record  books  of  this  kind  can  be  made  to  run  horizontally  across  the 
page  for  a  number  of  weeks  without  rewriting  names  of  customers.  By 
allowing  one  line  to  a  name  as  many  as  eighty  accounts  can  be  accommo- 
dated on  a  page.     A  recapitulation  of  totals  of  pages  will  give  amount  of 


Names 

Dal.Dua 

D<3>^>2»    of   WceK 

T^r 

!v,Jj 

T  3m'A\ 

J50?- 

1 

2, 

3 

-4 

5 

6 

7 

11.95 

*l.25 

25 

20 

\5 

25 

2.0 

2.0 

2.0 

sales  per  week.  The  total  column  can  be  dispensed  with  as  the  total 
charges  for  the  week  added  to  the  old  balance  will  equal  the  amount  of 
the  new  balance  added  to  t lie  amount  paid,  provided  the  work  has  been 
correctly  performed,  and  the  writing  of  the  total  is  unnecessary. 


8 


There  is  also  the  question  of  keeping  track  of  the  delivery  wagons,  SO 
that  the  amount  of  bread  delivered  can  be  checked  with  the  amount  charged 
according  to  the  driver's  reports  and  the  amount  returned  by  the  driver. 
One  method  very  much  used  in  this  connection  is  to  furnish  each  driver 
with  a  ticket  on  which  will  be  entered  the  amount  of  supplies  taken  out 
by  him,  with  space  provided  so  that  he  can  record  on  his  ticket  the  supplies 
delivered,  where  delivered,  cash  received,  amount  to  be  charged,  etc.  On 
his  return  to  the  store  these  tickets  are  checked  over  and  the  balance  of 
supplies  not  accounted  for  compared  with  the  driver's  returns. 

Another  method  is  to  keep  a  record  of  these  supplies  in  a  book,  charging 
the  driver  with  the  value  of  the  supplies  he  takes  out  on  each  round, 
and  crediting  him  with  the  value  of  the  goods  he  returns  and  the  amount  of 
charges  which  he  reports  (on  separate  memoranda).  Experience,  however, 
shows  that  this  method  is  more  laborious  than  the  first. 

Retail. 

The  Adrian  Coal  Co.  does  a  retail  business,  handling  lump,  egg,  nut  and 
slack  coal,  and  purchasing  in  car-load  lots. 
The  principal  accounting  forms  used  are: 

Accounts  Payable  and  Car  Register. 

Delivery  Ticket. 

Cash  Book. 

Cross-Entry  Journal. 

General  Ledger. 

Sales  Ledger  and  Stock  Record. 
As  the  company  has  plenty  of  working  capital,  it  is  proposed  to  pay  all 
bills  on  the  ioth  of  each  month,  taking  advantage  of  cash  discounts..  The 
Voucher  System  is  therefore  used,  and  Accounts  Payable  are  filed  away  by 
months  in  numerical  order.  Should  payment  of  a  bill  be  delayed,  and  thus 
be  included  in  another  month's  payments,  a  blank  voucher  is  inserted  in 
the  proper  numerical  order,  referring  to  month  and  number  after  which  the 
voucher  may  be  found. 

Accounts  Payable  and  Car  Register. 

This  Register  contains  the  distribution  of  different  kinds  of  coal  pur- 
chased. An  account  is  opened  in  the  General  Ledger  with  each  kind,  and 
the  monthly  totals  of  the  "Received"  columns  posted  to  the  debit  of  these 


A  cc 

o<-ir*-r~s    t=>A-vA.0t-C 

&,   cstr*     oeo 

s-r&Gi 

DoT~ 

Accounf     of 

CapNo 

Conteofe 

Date, 

oecd 

Empty  |       Nl  a 

Arriounf 

i  a- 

f5,fd 

sSU.,1 

Billed 

Orcd 

r  .':-.• 

I.V.J 

~- 

«COU/VT 

.s   o^y-iaiff 

£ 

e>««>    »cc/v»7-c 

=3 

, 

(viw1- 

Lf 

S^ocJr,.^^ 

0<rclo 

i    hecF 

1    'J. 

Amourff 

Dak 

**—- **-• 

B.lled    P««J 

D    - 

D.JleJ 

Cecil 

accounts,  which  will  therefore  show  the  quantities  purchased.  The  items 
entered  in  the  sundries  column  will  be  posted  in  detail. 

In  the  "Reclamation"  column  are  entered  the  amounts  of  claims  or 
deductions  in  respect  to  differences  between  quantities  billed  and  quantities 
received. 

The  total  of  the  first  "amount"  column  will  be  credited  to  Vouchers' 
Payable  Account  in  General  Ledger.  The  totals  of  distribution  money 
columns  will  be  debited  to  the  accounts  opened  with  each  kind  of  coal.  The 
sundries  column  is  intended  for  miscellaneous  supplies  to  be  posted  in 
detail. 

The  total  of  the  second  "Amount"  column  will  be  entered  in  the  Cash 
Book  to  the  debit  of  Vouchers'  Payable  Account,  which  will  show  on  the 
ledger  somewhat  as  follows : 

Vouchers  Payable  Account. 

Dr.  Cr. 

Freight  Vouchers  for 

Reclamations,  etc.  month. 
Cash. 

The  balance  of  this  account  will  therefore  exhibit  the  amount  of  out- 
standing Accounts  Payable. 

In  case  it  is  found  inconvenient  to  carrv  the  Car  Record  on  the  Accounts 


C 

»r> 

P^co^d 

OA 

Gw-Na 

Dote. 

n^Pd 

:  A 

M.K.«lLr.i 

l_„mp 

t«S  ..vd    M„->    0  =  „1 

>SI«c^    <=«*• 

sLcks 

D«o.«^KJ> 

lnv.W* 

.,..'.■,- 

.-■ 

lr7V  M 

IV 

'-,,  ,-> 

l-wW+ 

...  vvl 

■■■-. 

Payable  or  Voucher  Record  form,  the  above  separate  form  of  car  record  will 
be  found  useful. 

By  both  methods  the  totals  of  quantity  columns  are  posted  to  the  debit 
memorandum  stock  accounts  kept  with  each  class  of  fuel,  these  accounts 
being  credited  with  reclamations  and  shortages.  A  separate  account  is 
carried  for  quantities  sold,  as  hereafter  shown,  so  that  a  perpetual  book 
inventory  results,  which  will  show  amount  which  should  be  on  hand  in  the 
yards. 


I<> 


Combination  Cash-Journal,  Etc. 

The  wholesale  and  retail  business  is  frequently  combined,  in  which  case 
the  car  and  quantity  record  may  also  be  advantageously  combined  by  the 
use  of  a  form  after  the  following  pattern : 


Date 

Ti'cKei 

Order 

C»r» 

A6ent» 

Team. 

Ca&h 
As  lea 

Where 

EYard 
.Sale*, 

^ 

L. 

Wbole;*sle 

LT 

Rcti'.  1 

N-^e, 

Addr^» 

ntmJrn» 

ftrt  P>rw 

TwatS.n 

» 

-SoF-t- 

r-f  a  r-  d 

Co^t 

Wo  od 

K.nd 

Lump 

Nut|auck 

Am'nt 

Kind 

5)b« 

Cheat 

r.fio 

Grate 

ArrrnT 

Kind 

Nul 

Too 

Amn+ 

Corda 

.'..If 

M.nd 

Amount 



1 

It  will  be  noticed  that  this  is  a  combination  Cash-Journal  and  out- 
quantity  record,  and  it  could  therefore  be  completed  by  the  use  of  Form  2, 
which  is  an  in-quantity  record. 

In  many  cases  a  further  distribution  is  made  on  the  memorandum  stock 
accounts  by  opening  an  account  with  each  car  and  crediting  it  with  sales  as 
indicated  later. 

Delivery  Ticket. 

For  a  delivery  ticket  a  form  similar  to  that  appended  is  recommended. 
It  is  made  in  triplicate,  two  copies  being  handed  to  the  teamster  and  one 
retained  at  the  office,  from  which  to  post  the  charge.     The  teamster  leaves 


Mo     I7S8 

.Sold  -fe_ 


Alcolu 


I902 


Te^rr>^te 

Car=>  NJo, 

O  *-•<=»  r-jTiTy 

ur. 

D  e.s>  c  r*  1  pt?o  r»_ 

C  O.D  1  Amoun+ 
opfeid      of  CK<an£>e. 

1 

Receivec 

J     by 

/ 

one  copy  with  the  customer,  and  the  other  is  signed  by  the  customer  and 
turned  in  by  the  teamster  as  a  voucher  for  the  delivery  of  the  goods. 

Where  orders  are  very  numerous  a  recapitulation  sheet  can  be  used 
from  which  to  make  postings  as  per  sketch. 

The  C.  O.  D.  and  Cash  columns  will  show  total  receipts  each  day,  and 
afford  a  check  on  the  teamsters'  collections. 


11 


Cash  Book. — Journal. 

We  show  on  a  previous  page  a  form  of  combination  Cash-journal. 
Where  in-quantities  are  recorded  in  an  Accounts  Payable  book  or  Car 
Record,  and  out-quantities  in  the  Sales  Ledger,  posted  direct  from  Sales 
tickets,  the  Cash  Book  and  Journal  are  much  simplified.  The  Cash  Book 
may  be  ruled  like  thin: 

Cash     Received 


Dakte-     Nc*rr?e 

Aclc(re.s.& 

L-.f\ 

Ledger 

General 
Ledtfer 

Cash 

vSales 

C.0.D.5 

V 

/ 

cwb  r^\A 

Date. 

N^rrttfv 

Voucher 
No 

II    I  Voucher 

General 
Ledger 

Expense 

rpe'i^k"!" 

^~ 

j 

/ 

The  Journal  would  be  used  for  cross-entries  only,  such  as  allowances, 
shortages,  etc.,  and  beside  the  ledger  columns  would  require  on  the  Credit 
side  columns  for  material  affected,  viz. :    Lump,  Egg,  Nut  and  Slack. 

The  Sales  Ledger  can  be  arranged  on  the  tabular  system  to  contain  a 
record  of  out-quantities,  the  totals  of  which  are  posted  monthly  to  the  credit 
of  the  memorandum  quantity  or  stock  accounts  above  mentioned,  thus 
completing  same  and  giving  approximate  inventory  on  hand. 

Tabular  Ledger. 

The  Tabular,  or  Self-proving  Ledger,  is  a  ledger  in  which  the  names  are 
written  down  the  side  of  a  page  instead  of  at  the  top,  a  page  or  a  certain 
position  of  a  page  being  used  for  all  the  transactions  relating  to  an  account 
during  a  given  period,  these  transactions  being  extended  horizontally  across 
the  page  instead  of  perpendicularly  as  in  the  ordinary  ledger.   It  is  provided 


Ua 

nod''/ 

I&OZ 

AS6-0 

.,~ 

- 

902. 

Ac«ou„+ 

DALHIC 

MTS 

,^«. 

.-... 



i.U„* 

«*„ 

.  - 

««*» 

«t«e 

O.TC 

3UK* 

,.. 

■     - 

««» 

OCBrTJ 

cf<=  1bm 

>  roth  account         7<9  lines    to  /o<a<*c    occommouiitr/d    ^?iJ 

with  debit,  credit,  and  balance  columns  in  sections  of  weeks,  months,  or 
days,  so  that  the  footing  of  the  debits  of  the  preceding  month,  week,  or 


L2 


day,  when  added  to  the  footing  of  the  debits  to  the  accounts  on  each  page, 
will  agree  with  the  footing  of  the  credits,  plus  the  footing  of  the  new 
balances,  providing  the  work  of  drawing  off  the  new  balances  has  been 
correctly  performed.  The  work  on  from  forty  to  eighty  accounts  may  by 
this  method  be  proved  by  one  operation  so  far  as  addition,  subtraction  and 
setting  down  of  balances  is  concerned.  By  this  method  quantities  sold  can 
also  be  kept  track  of  with  facility  without  the  intervention  of  a  sales  book 
by  providing  columns  on  the  debit  side  of  each  section,  as  per  illustration, 
making  a  recapitulation  of  the  totals  of  each  page  at  the  end  of  the  month 
and  posting  the  grand  totals  to  the  credit  of  the  Memorandum  Stock 
accounts,  the  postings  to  the  ledger  being  made  direct  from  the  delivery 
tickets. 

Branch  Accounts. 

Most  large  coal  merchants  have  distributing  yards  and  wish  to  keep  an 
account  with  each  other  in  order  to  ascertain  which  are  or  are  not  profitable. 
All  accounts  will  be  kept  on  the  main  office  books,  the  yards  making  a  daily 
report  of  sales  and  collections. 

Open  two  accounts  with  each  branch,  one  called  Yard  Stock  account, 
and  the  other  Yard  Expense  account.  Debit  Yard  Expense  with  all  expen- 
ditures or  liabilities  incurred  in  relation  thereto.  Debit  Yard  Stock  with 
quantities  and  cost  of  goods  furnished  for  sale,  and  credit  it  with  sales 
made — quantities  and  amounts.  At  the  end  of  each  month  these  accounts 
will  then  show  inventory  on  hand,  gross  profit,  and  net  profit. 

Wholesale. 

The  Rochester  Coal  and  Mining  Co.  receive  orders  from  retail  cus- 
tomers, which  they  forward  to  the  mines,  from  which  shipment  is  made 


To 


FORM  1 


G  e  RTCeVne  <~Ls  •  ~ 

PMcca-Sc?   £-Kip>  coal  aa    "TollowvS-    Top  our«  accour.1", 

v5ub.No. 

K.'nd 

Wberx 

To 

Deification 

lrrvotce  a+ 

Rojjfe    <$.  Remar»Ke 

/     Mc  A  1  e-^fe  n    Coal-   M.  Oo, 

f>e~ 

direct  to  retail  customers,  orders  being  billed  to  The  Rochester  Coal  and 

13 


Mining  Co.,  who,  in  turn,  bill  their  customer.  This  system  does  not  call 
for  any  complicated  accounting,  but  there  are,  nevertheless,  quite  a  number 
of  forms  used,  and  some  of  these  it  may  be  well  to  illustrate  and  explain. 

Form  No.  i  is  order  blank  sent  to  mine. 

Form  No.  2  is  advice  sent  to  customer. 

Carbons  of  these  two  forms  are  retained,  and  the  particulars  entered  in 
the  Order  and  Shipping  Record,  which  is  also  a  daily  trading  account, 
showing  gross  profit  on  sales  to  date.     This  form  is  ruled  in  sections  of 


FORM  2 

O  \<  UVj^rr.^                                                     \&>o 

coa) 
our» 

\^n~A    ur                                                              whi'ck,     &Ha\\     Have- 

prompt    2»tle r^1"i  0 rt,  . 

Th-^nKi"^     vou,   we  ape 

/       M°AI.  C.  oH:Co„ 

three  months,  as  all  accounts  are  expected  to  be  paid  within  that  period. 
At  the  end  of  the  month,  Accounts  Receivable  Account  is  debited  with  total 
of  "Amount"  columns  and  Accounts  Payable  is  credited  with  total  of 
"Cost"  columns.     A  new  page  is  started  for  each  month  and  unpaid  items 


M'TUImT*- 

r»  Coa 

>l    and   Mini 

rrj,    Co., 

rw»* 

K,nJ 

A+ 

To" 

DaTi    \r       .0 

In.tal 

Wei$n+ 

Tin. 

Sold 

A-r>o„rVt- 

u..r 

'"nT" 

•Sh<-«-i 

-Sub 

Wh<-i 

Uan 

or.  Confi»c-«1?d 


Addncsi, 


at  the  end  of  three  months  may  be  transferred  by  Journal  entry,  crediting 
Accounts  Receivable  and  charging  Sales,  as  the  transferred  entries  will  be 
included  in  the  charge  to  Accounts  Receivable  of  the  total  of  the  new 
page.  By  this  method  it  will  be  observed  that  a  Sales  Ledger  is  dispensed 
with  entirely,  or  we  may  say  that  this  form  is  a  combined  Order  and 
Shipping  Record  and  Sales  Ledger. 

The  Order  blanks  are  numbered  consecutively,  the  column  headed 
"Sub.  No."  referring  to  the  mines  to  which  the  orders  are  sent.  Thus 
orders  sent  to  one  mine  are  sub-numbered:  Ai,  A2,  A3,  etc.  Orders  sent 
to  another  mine  are  sub-numbered:  Bi,  B2,  B3,  etc. 


It 


System  for  Retail  Ice  Company. 

One  of  the  greatest  difficulties  encountered  in  keeping  the  books  of  a 
business  of  this  kind,  is  the  large  number  of  accounts  to  be  handled. 

These,  for  the  sake  of  convenience,  are  usually  kept  in  territorial  order, 
i.  e.,  all  the  Michigan  avenue  accounts  are  kept  together  in  rotation  of 
numbers  of  houses.  Thus,  one  account  will  be  headed  1426  Michigan 
avenue,  and  underneath  this  the  name  of  the  tenant.  The  next  account  will 
be  1428  Michigan  avenue,  etc. 

Owing  to  the  large  number  of  accounts  in  a  business  of  this  kind  it  is 
usually  necessary  to  open  a  new  ledger  every  year,  involving  a  large  expen- 
diture of  time  and  labor. 

Also  if  Mr.  F.  W.  Jones  of  4129  Buckingham  avenue,  owed  a  balance  of 
$5.00  and  removed  to  2649  Michigan  avenue,  it  is  necessary  to  transfer  the 
account  and  great  confusion  will  ensue. 

Some  ice  companies,  therefore,  have  adopted  the  card  ledger  system, 
and  have  found  that  it  is  much  easier  to  keep  cards  in  territorial  order  than 
is  the  case  with  ledger  pages,  index  cards  being  provided  for  each  street  or 
avenue,  the  names  of  the  streets  arranged  alphabetically,  that  is,  Adams 
street  would  precede  Bates  street,  the  other  streets  following  in  alpha- 
betical order,  Charles  street,  Division  street,  Ellis  avenue,  Frankfort 
street,  etc. 

When  a  card  is  filled  up,  all  that  is  necessary  to  be  done  is  to  add  a  new 
card.  In  a  bound  ledger,  if  the  space  provided  for  an  account  proves 
insufficient,  the  account  must  be  transferred  to  another  page,  and  if  the 
space  allotted  to  Michigan  avenue  is  insufficient,  part  of  the  records  of 
that  avenue  must  be  provided  for  in  another  part  of  the  ledger. 

If  F.  W.  Jones  removes  from  4129  Buckingham  avenue  to  2649  Michi- 
gan avenue,  his  card  also  will  be  removed  from  that  portion  of  the  file  con- 
taining the  accounts  of  customers  on  Buckingham  avenue,  the  correct 
address  noted  upon  it  and  placed  in  proper  numerical  order  with  the 
Michigan  avenue  cards. 

The  cards  can  be  so  ruled  as  to  provide  for  a  large  number,  usually  fifty- 
two,  charges  and  credits  on  one  side  and  fifty-two  on  the  other. 

When  the  card  is  completely  filled  it  is  removed  to  a  transfer  file  and  a 
new  card  substituted.  By  this  system  the  accounts  with  each  customer 
can  always  be  kept  together  and  will  not  be  distributed  through  several 
ledgers,  as  would  be  the  case  if  they  were  recorded  in  a  book-ledger. 

It  is  scarcely  necessary  to  say  in  this  connection  that  the  original 
entries  are  made  on  the  cards,  the  totals  only  being  passed  through  the 
journal  once  a  week,  or  once  a  month,  as  may  be  determined  by  the  needs 
of  the  business.  The  debit  being  Ice  Ledger  Account  and  the  Credit  Ice 
Sales  Account,  or  whatever  representative  account  may  be  carried. 

15 


lie  card  ledger  system,  accounts  with  customers  can  be  divided  into 
as  many  sections  as  desired,  each  section  being  proved  separately.  This  is 
a  great  convenience  in  cases  where  the  volume  of  accounts  is  very  large. 

Separate  columns  must  be  provided  in  the  cash  book  and  journal  for 
each  ledger  section,  and  separate  accounts  with  each  ledger  section  being 
carried  in  the  general  or  private  ledger. 

The  trial  balance  of  the  entire  business  can  then  be  obtained  in  a  few 
minutes  at  any  time  from  the  representative  and  nominal  accounts. 

The  accuracy  of  the  balance  of  each  ice  ledger  account  can  be  deter- 
mined as  found  convenient  by  footing  the  balances  of  each  section  and 
comparing  the  total  with  the  balance  shown  on  the  representative  account 
in  the  general  ledger. 

System  for  Retail  Drug  Business. 


A  large  drug  store  is  usually  divided  into  four  departments,  viz. 

1.  Proprietary  medicines,  toilet  articles,  etc. 

2.  Prescriptions. 
3- 
4- 

In  order  to  show  how  statistics  may  be  obtained  with  the  least  possible 
expenditure  of  time  and  trouble,  we  will  describe  the  methods  used  in  a 
large  drug  business  recently  established.  It  is  an  incorporated  company 
capitalized  at  $30,000,  in  300  shares  of  $100  each,  of  which  A,  the  President, 
holds  200  and  B,  the  Secretary  and  Treasurer,  holds  100.    There  is  both  a 


Soda  fountain. 
Cigars. 


PUnC/-fA5E.   &£CORD 


Drffc  of 

lr?v'ce  • 

NJ  a  m<s.G> 

R>l  10 

Total   '      Dep.  1 

Dep.2 

Dep  .9 

Dep    A 

cash  and  a  credit  business,  the  credit  sales  being  comparatively  few  in  num- 
ber. The  accounting  details  to  be  considered,  therefore,  consist  of  pur- 
chases and  expenses  on  the  one  hand,  and  cash  sales  and  credit  sales  on 
the  other. 

A  small  purchase  record  is  used,  ruled  for  name  of  creditor,  date  of 
invoice,  total  of  invoices,  and  four  columns  for  distribution  to  the  four 
departments.  As  invoices  arc  received,  they  are  entered  in  this  book  and 
the  bills  arc  then  filed  away  under  their  due  dates  for  rash  discounts,  no 
account-  with  crditors  being  carried  in  the  ledger.  At  the  end  of  the 
month,  this  purchase  record  is  footed  and  the  total  of  the  total  column  is 


16 


credited  to  an  account  called  Accounts  Payable  Account.  The  total  of 
each  department  column  is  charged  to  an  account  carried  in  the  ledger  with 
that  department. 

We  have  now  provided  for  showing  in  the  books  the  total  purchases 
during  the  month  and  the  total  belonging  to  each  department.  The  cash 
paid  side  of  the  cash  book  is  provided  with  a  column  headed  "Accounts 
Payable."  When  the  bills  are  paid,  they  are  entered  in  this  Accounts 
Payable  column,  no  postings  being  made  until  the  end  of  the  month,  when 
the-  total  of  that  column  is  debited  to  Accounts  Payable  account  in  the 
ledger.  The  balance  of  this  Accounts  Payable  account  will,  therefore, 
show  at  all  times  the  amount  of  unpaid  bills  on  hand. 

With  regard  to  expenses,  the  cash  paid  side  of  the  cash  book  is  pro- 
vided with  a  column  for  each  department  so  that  whenever  possible  the 


Date 

Ms»me>s 

rbi.'o 

Accol 

rft 

Geri 

1. 

Cash     Sales 

Rec'vble 

LeJ^ero 

Dept  1 

Dept.2 

Dept.3 

Dep.4| 

ii 

/-  J 

expenditures  of  each  department  are  charged  against  that  department. 
General  expenses,  however,  which  cannot  be  charged  to  any  particular 
department,  should  be  pro  rated  on  the  basis  of  the  turnover. 

With  regard  to  the  sales,  duplicate  tickets  should  be  used,  one  color  for 
cash  sales  and  another  for  credit  sales,  so  that  the  two  kinds  of  tickets  can 
be  readily  distinguished.  The  corporation  in  question  used  a  cash  register 
in  each  department.  It  was  one  of  these  new  devices  which,  in  addition 
to  ringing  up  the  exact  amount  of  the  bill,  will  record  whether  cash  or 
credit,  and  identify  the  salesman  who  made  the  sale.  The  cash  is,  of  course, 
handed  to  the  cashier  with  the  ticket.  There  are  separate  columns  in  the 
cash  book  on  the  cash  received  side  for  receipts  from  customers  on  credit 
sales  and  cash  sales  for  each  department.  At  the  close  of  each  day,  the 
cashier  foots  up  the  amounts  of  the  cash  bills  and  enters  the  total  in  the 
cash  sales  columns,  and  the  correctness  of  these  totals  is  checked  by  the 
cash  registers  of  the  different  departments.  It  is  also  checked  again  by  the 
balance  of  cash. 

Another  method  of  handling  cash  sales,  where  cash  registers  are  not 
used,  is  to  make  each  salesman  keep  his  own  cash  sales  account,  giving 
them  different  books  each  alternate  day,  thus  the  book  used  yesterday  will 
be  taken  up  by  the  cashier  and  the  total  of  the  sales  compared  with  the 
total  of  the  receipts  in  the  cash  book.  In  this  case  carriers  are  usually 
employed  from  the  different  departments  to  the  cashier's  office. 


17 


With  regard  to  credit  sales,  a  regular  account  is  kept  with  each 
customer  on  the  Loose  Leaf  Ledger  plan,  which  permits  of  the  transfer 
of  paid  accounts  to  a  separate  binder,  leaving  only  the  live  accounts  to  deal 
with,  which  is  a  considerable  advantage.  These  accounts  are  kept  in  alpha- 
betical order  on  the  self-indexing  style,  so  that  no  index  is  required.  They 
are  posted  direct  from  the  salesman's  credit  ticket  without  the  intervention 
of  any  other  record.  The  cash  register  or  the  salesman's  own  record  give 
the  totals  of  the  credit  sales  each  day,  and  the  grand  total  is  charged  daily 
to  an  account  in  the  ledger  called  "Accounts  Receivable  Account"  and 
credited  in  their  respective  proportions  to  the  department  accounts. 
Accounts  Receivable  account  is  also  credited  at  the  end  of  the  month 
with  the  total  of  the  column  provided  in  the  cash  book  for  receipts  from 
customers.  This  account  thus  shows  the  total  outstandings  due  from 
customers. 

<^A£>M  RAID 


Date 

J\l<3me-.& 

folio 

1    Accts. 

Ger 

"1. 

Expenses 

Sy.ab!e 

Ledger; 

Dept  1 

Dep2 

Dep.3 

Dep.4  | 

The  accounts  receivable  account,  the  accounts  payable  account,  the 
department  accounts,  capital  account  and  any  other  representative 
accounts,  should  be  kept  separate  from  the  customers'  accounts,  because 
the  trial  balance  is  taken  entirely  from  the  former  as  per  the  following 
example: 


Dr. 

Cash  and  Bank $11,562  00 

Accounts    Receivable 5-295  50 

Furniture   and   Fixtures 2,17500 

Patent   Rights    10,000  00 

Dept.  1   156  04 

Dept.  3   559  68 

Dept.  4  852  98 

General    Expense    1,248  80 

$31,850  00 


Cr. 

Capital  Stock $30,000  00 

Accounts  Payable i,495  00 

Interest  and  Discount 56  75 

Dept.    2    298  25 


$31,850  00 


When  inventory  is  taken,  the  earnings  of  each  department  can  be  ascer- 
tained by  crediting  each  department  account  with  the  departmental  inven- 
tory.    The  department  accounts  will  then  show  as  follows : 


IS 


DEPARTMENT  No. 


Dr.  Cr. 

Inv.    Jan.    ist $    555  60       Cash    Sales    $1,85950 

Purchases    1,68044       Credit   Sales    97485 

Expenses    864  42       Inv.  June   ist 780  50 

Balance — Gross   Profits 5*4  59 


$3,614  85  $3,614  85 

We  have  referred  to  the  "turnover"  on  which  general  expense  should  be 
pro-rated,    and    now    proceed    to    illustrate    same : 

Inventory,   Jan.    ist $    555  60 

Purchases    1,680  24 

Expenses    864  42 

$3,100  26 
Less  Inv.  June  ist 780  50 

Turnover   $2,319  76       Sold  for  $2,834  35. 

The  percentage  of  general  or  administrative  expense,  therefore,  would 
be  calculated  on  the  total  turnover  of  the  four  departments,  after  which  the 
amounts  to  be  charged  against  each  department  could  be  calculated  in  the 
usual  way,  the  balance  of  the  department  accounts  then  showing  net  profit. 

Another  method  of  taking  care  of  customers'  accounts,  if  they  are  not 
very  numerous,  is  as  follows :  Obtain  from  a  manufacturing  stationer  a 
sufficient  number  of  boxes  made  to  accommodate  your  bills.  Place  the 
duplicate  bills  in  these  boxes  (which  should  be  marked  outside  with  the 
name  of  the  customer  and  kept  in  alphabetical  order)  and  place  above  them 
a  form  of  statement,  which  should  also  be  in  duplicate,  with  carbon  sheet 
between.  On  this  statement  enter  date  and  amount  of  each  bill  as  depos- 
ited in  the  boxes.  At  the  end  of  the  month  go  through  the  boxes,  foot  the 
statements,  leave  the  duplicates  in  the  boxes,  and  mail  the  originals  to 
the  customers  with  request  for  payment.  Cash  payments  should  be 
entered  on  these  statements  from  the  cash  book,  and  when  bills  are  paid, 
the  papers  relating  to  the  accounts  should  be  taken  out  of  the  boxes  sj 
that  they  can  be  used  for  other  customers. 


18 


PART  VIII. 


Pay-Roll  Systems. 


Pay-Roil  Systems. 


Many  different  methods  of  arranging  pay  rolls  have  been  devised  with 
a  view  both  of  saving  clerical  work  and  obtaining  a  check  on  the  accuracy 
of  the  pay  roll. 

Pay  rolls  are  frequently  complicated  by  the  employes  obtaining 
advances  on  their  pay,  and  being  charged  with  goods  or  supplies.  In  the 
days  when  book-keepers  transferred  everything  into  the  journal  prior  to 
posting  to  the  ledger,  they  also  kept  their  pay  roll  accounts  in  the  lengthiest 
and  most  roundabout  way  possible.  From  the  pay  roll  they  copied  all  the 
names  of  the  employes  into  the  journal,  and  having  opened  an  individual 
account  with  each  employe  in  the  ledger,  they  proceeded  to  post  to  those 
accounts  from  the  journal.  Now  any  proper  system  used  will  provide  for 
but  two  postings  to  ledger  accounts,  the  charge  of  the  total  to  ledger 
account  and  the  credit  to  cash.  The  pay  roll  book  itself  is  so  arranged  with 
a  system  of  short  leaves  following  the  names  pages  (see  illustrations)  that 


Weekly                                      ^      -^^^                   ^^""""^"""^^■O-* 

Pcy  Doll                     _^-^        Jar^uaPV        ^"~~ •*^"^     febPuary^^ 

Non^i 

Salary 

CIK.No. 

S" 

12" 

'  19" 

2  6" 

2J' 

1    9' 

l€>' 

23" 

W.Willmmn. 

IflOO 

i 

l."S 

nn 

\A 

fiO 

\n 

i  p 

10 

Ifl 

nn 

K«5 

QQ 

6QO 

2 

6 

nn 

6 

nn 

& 

nn 

e> 

O.  ) 

HWGIiPT' 

5?022 

3 

?o 

nn 

1  7 

',0 

20 

2.0 

»  J,  Arnold. 

P/522 

A 

90. 

"^ 

?fl 

\e> 

P/=5 

.*5 

<r> 

7 

, 

P> 

a 

IO 

WnnKlyBtnb 

,<i07 

so 

saa 

SQ 

49? 

QO 

xo\ 

ec 

the  names  of  the  employes  need  be  written  only  once  in  thirteen  weeks, 
perhaps,  instead  of  every  week.  Where  the  employes  are  charged  with 
goods  and  cash  advances,  a  combined  pay  roll  and  ledger  is  used, 
which  is  especially  adapted  to  the  requirements  of  plantations  and 
lumber  camps,  where  a  general  store  is  maintained  and  employes  are  paid 
by  tickets  representing  the  value  of  wages  earned,  which  they  can  either 
exchange  for  cash  at  the  company's  office  or  for  goods  at  the  company's 
store. 

Another  labor-saving  method  is  illustrated  below,  where  the  pay  roll 
clerk  simply  takes  account  of  time  lost  instead  of  time  working,  so  that  if  a 


man  works  six  full  days  with  the  exception  of  two  hours  on  one  clay,  it  is 
only  necessary  lo  write  the  figure  2  on  the  pay  roll  instead  of  the  figures 
io  for  five  days  in  the  week  and  the  figure  8  on  the  sixth  day  when  the  time 
was  lost.  By  the  ordinary  method  twelve  figures  would  be  written  in  the 
pay  roll  book;  by  this  method  only  one  figure  is  written,  a  saving  of  eleven 
figures.  If  it  is  necessary  to  keep  track  of  the  time  of  two  hundred 
employes,  it  is  easy  to  sec  what  a  saving  of  time  this  method  affords. 

Each  employe  ha  a  number  and  carries  a  check  with  the  correspond- 
ing number.  He  is  required  to  deposit  the  same  in  the  morning  before 
going  to  his  post  of  duty  in  a  box  attached  to  the  check-board,  which  is 
numbered  from  one  up  according  to  the  number  of  employes.     After  the 


FROM 

/w.ov-.evT 

To.  _ 

.May./^fl 

I89.a... 

/V^tMC 

1.1 

e 

■  ) 

vv 

1  o 

T 

i- 

3 

1      '■ 

houns 

pp'ice     AmouaT 

Remcar>K.s 

o 

io 

l<~? 

IT 

5 

o 

(=>              3 

oo 

l( 

IO 

in 

IO 

■■• 

-*> 

» 

/5                   9 

60 

II 

F~QO/M.. 

.Me>_y.&. - 

To . _.MJs.y..  -Is3>— 

189.9.... 

A/AMC 

N/1 

T 
'  3 

w 

i  o 

T 

1 

13 

riouR-s 

Pro'.oa 

Arr?ouai~ 

Rernapki 

PYJone-s 

n 

S5 

O 

<=; 

-=K 

r>n 

rl      tSn->VB=> 

'\ 

*5 

& 

S 

fyO 

1 

hour  of  commencement  the  time-keeper  distributes  these  checks  on  the 
check-board  and  takes  a  record  of  all  checks  not  on  the  board,  which 
represents  the  employes  not  present.  The  board  is  then  kept  in  the  time- 
keeper's office  until  the  noon  hour  for  closing,  when  the  same  operations 
are  gone  through  as  in  the  morning.  If  for  any  reason  an  employe 
desires  to  leave  before  the  regular  time  for  closing  he  procures  an  order 
for  his  check  from  his  respective  foreman,  stating  the  number  of  hours  he 
has  worked  up  to  the  time  of  his  departure.  This  order  is  presented  to 
the  time-keeper,  who  delivers  to  the  employe  his  check  and  makes  a  record 
of  his  time  on  the  list  above  referred  to.  Each  foreman  is  required  to 
make  a  daily  report  of  his  employes  who  are  absent,  and  this  report  is 
checked  against  the  time-keeper's  record.  This  forms  a  safeguard  for 
errors.  This  forms  a  complete  record  of  employes  not  present  and  the 
balance  of  the  employes  on  your  pay-roll  must  necessarily  be  present. 

You  are  now  ready  to  post  to  your  time-book  and  here  comes  the 
economical  feature  of  this  system.  You  simply  post  the  check  numbers 
that  were  absent;  those  present  taking  care  of  themselves  on  the  books, 

■u  will  discover  later.  In  order  thai  you  may  fully  understand  how 
this  is  done,  I  will  give  below  an  illustration  of  the  method  generally  used 
by  time-keepers,  and  one  to  the  system  I  refer  to. 

6 


For  illustration,  if  Air.  Jones  in  the  above  sketch,  works  ten  hours 
the  8th,  ioth,  nth,  12th  and  13th,  you  will  simply  leave  the  spaces  under 
those  dates  blank,  and  if  on  the  9th  he  was  not  working-  all  day,  you  will 
place  a  cipher  under  that  date.  This  would  show  that  he  worked  50  hours 
for  the  week  ending  May  13th. 

The  next  man  on  the  pay-roll,  J.  Smith,  works  full  time  every  day 
except  the  13th,  on  which  date  he  labors  two  hours.  You  enter  the  two 
hours  under  that  date  and  leave  the  balance  of  the  week  blank;  this  shows  a 
total  for  him  for  the  week  ending  May  13th  of  52  hours,  and  so  on  through 
the  pay-roll. 

If  there  is  piece-work  to  keep  account  of,  this  can  be  done  by  using 
the  card  system.  Each  person's  account  is  kept  on  a  card  large  enough  to 
take  in  a  pay-day.  Each  card  shall  contain  the  name  and  check  number 
of  the  person  for  whom  the  account  is  kept;  this  should  be  placed  at  the 
top  of  the  card.  The  balance  can  be  ruled  or  printed  to  meet  the  require- 
ments of  any  business.  These  cards  are  filed  numerically  in  a  box  or 
drawer  suitable  for  the  purpose,  always  keeping  your  live  accounts  only 
in  this  drawer.  The  total  of  each  card  is  posted  to  the  time-book  every 
pay-day;  the  cards  are  then  filed  away  for  further  reference,  and  new  ones 
started  for  the  ensuing  pay-day. 

Many  pay  roll  books  or  sheets  are  arranged  for  signatures  of  employes, 
acknowledging  receipt  of  wages  paid.     The  disadvantage  of  this  is  that  on 


lTn\e    Doo 

K  and 

Pay  Rollfep-fKew^eK 

eo 

d^ 

Safupda 

y- 

^ 

L,.^T  26lk         1899 

:■! 

Names. 

- 

M 

T 

v. 

T 

r 

5 

"idfei  ||  Rate 

"Time  ReoDav 

An\our\T 

_       J-Surxdray' 

Ttffel 

CK-qS 

Balance 
Due. 

DecdPeyirtti^full 

■L 

_L 

j_ 

a_ 

! 

^_ 

Q 

& 

1 

S> 

no 

, 

P? 

i 

fW£.     M 

0 

-M- 

1  -4 

oo1^"^ 

i 

A 

j 

'-~ 

■7 

-1 

FWI.3 

OC,      -3 

a 

*5~ 

-i 

FV,„W=  .  lo.^ 

■A^ 

:- 

T. 

^ 

-- 

-"■ 

2 

-O 

a 

;o. 

■ 

' 

7 

' 

1 

1 

L- 

f>X? 

ie 

'--■] 

16 

■''- 

r>^,«.    m 

«=, 

7-T 

1  n 

•;- 

10 

.-  •  ) 

D^.Ar^K     C-o 

1 

• 

1 

'  1    *« 

, 

7 

~ 

.•-0 

1 

1 

| 

■ 

,1    6 

1 

' ' : 

D 

"''. 

V 

-r 

l£ 

nrrve    DooK  ar\d  nay  Uoll  f 

"" n 1 

U 

-iH>ftfc         IA9C) 

Nc 

Narrys. 

3 

M 

T 

W 

T 

P 

£> 

l.-^l 

Pec'd  Payn^fLII 

•■ 

AvJ.™™,   A 

, 

1 

1 

1 

, 

6 

•               / 

Aii.^-tsA  n 

1 

1 

1 

1 

<5 

k 

a. 

FwMterv   M 

1 

1 

, 

1 

1 

7 

^ 

■ 

0 

j 

1 

1 

1 

.«> 

1- 

i 

'? 

O 

0 

'■■ 

?.fc 

,, 

-" 

e 

„ 

2 

C.kol.^n^r,  OI<- 

1 

1 

1 

<s£ 

t- 

r^ 

r>Pflc«-.  m. 

1 

1 

1 

1 

1 

6 

s 

S. 

1 

1 

1 

, 

5 

s 

1 

1 

1 

<5 

^ 

,i 

a 

signing  the  record  each  employe  is  in  a  position  to  see  the  rate  of  wages  others 
are  receiving,  and  this  is  frequently  undesirable.  While  devices  have  been 
invented  for  the  purpose  of  hiding  all  other  entries  on  the  pay  roll  except  that 
of  the  employe  signing  it  (see  illustration),  we  think  the  best  plan  is  to  issue 


tickets  to  each  employe,  the  tickets  stating  the  amount  of  wages  due  and  the 
instruction  that  on  receipting  same  and  presenting  it  to  the  cashier  the  amount 
will  be  paid.  These  receipts  can  then  be  filed  away  as  vouchers  or  pasted  on 
the  pay  roll  book  or  sheet. 

PAY  ROLL  SYSTEM  FOR  HARDWARE  MANUFACTURING  COMPANY. 

The  following  method  of  handling  the  labor  account  of  a  large  manu- 
facturing concern,  will  perhaps  be  of  interest 

The  company  is  engaged  in  the  manufacture  of  builders'  hardware  and 
employs  about  300  men ;  the  labor  is  subdivided  into  departments,  beginning 
at  the  pattern  department,  and  ending  with  the  packing  and  shipping  depart- 
ment, each  department  having  a  foreman,  who,  in  addition  to  their  other 
duties,  keep  the  time  of  the  men  in  their  respective  departments.  The  fore- 
/QOrs/  rou/vDnv 

RoanoKe  V^.Mch    13  -  ie>99 
Time  Report  ^r»  c)ohn     s^mrfK _ 

W.tfi  Trie  Virginia  MaFdwdPe  Mf©  Co. 


1+e.  rr\^> 

^7 

i« 

<& 

Trnc 

,0 

10 

© 

*e>Ao  Caps  fi-Shcll*       ifc» 

e>y 

20 

A<S> 

'3/1 7  LoIcK  &  Key  Doffe     • 

*     2>2.  Catches 

*       10   R_llx   rrames 

'6647/>  r>=or,-te  ^,3-ts»,^e»  • 

*         "             Lev«r.»£S&pa     • 

*    ©€>0  Escutcheons 

Q  Pur- rtry^ 

"for*err\a'-v^ 

man  reports  the  time  of  them  to  the  time-keeper  twice  a  week,  Thursdays  and 
Saturdays,  on  slips  specially  ruled  for  this  purpose  (see  form  No.  i).  These 
slips  are  written  up  by  the  time-keeper  on  a  specially  ruled  book  (see  form  No. 
2),  the  letters  D  and  J  after  the  names  of  the  workmen  indicate  whether  the 
work  is  day  or  job. 


iFiorv  rou/s/nny 

Afec/1 

cndina 

/Wc/j 

/.•1/.9P 

Names 

«.«» 

>.< 

T 

XV 

T 

r 

c- 

T;W 

Zrnt 

cJno  Sm.+H         =.      ,. 
64oCops  &  Shells 
347  LalSh  &K  DortS 
3  2    Cofeheo 
1©  FLIIcv'  rSa,rr>e>» 

S^-d-7  '/a  F"oor)ts  &,  .STK» 

Lc«»  aatops 

66O  CsejJlcheons 

Deri  Dave                   D 
cJ 
»/7-Sb«l's  &Capa 

i4o 
1  35 
1/5 
ifa2 

2e» 
1  OS 

20 

.0 

So, 
P-1 

•O 
II 

-it) 
a 

32 

40 

a 

10 

-1 

10 

e 

a 

Mi 
© 

3i6 

00 

99 

1  73 

?e 

^o 
IS 

1  26 
1  045 

1  3S 

2  5  1 

1  15 

1258 
560 

After  the  week's  work  is  all  entered  up,  prices  put  in,  extensions  and 
footings  made,  etc.,  the  totals  are  entered  in  the  pay  roll  ledger  (see  form  No. 
3)  with  the  parties'  names  and  number  of  hours  made.  The  job  hours  are 
entered  in  red  ink  and  the  day  hours  in  black  ink,  thus  readily  showing  the 
kind  of  work  each  man  has  done  at  a  glance. 


After  the  pay  roll  is  completed,  a  recapitulation  is  made  showing  the 
amount  of  day  and  job  work  of  each  department,  which  should  tally  with  the 

V/OO//V/A  rtADDWAQE.  'A-rro  Cos.    ,/^ay  Poll  fbr>  ween  ery/,^      Mc'h.     >3  -  199. 


N!<ar7\ee> 

M 

T 

Vv 

T 

r 

5 

dob 

rfoups 

Day 

'■■ 

fy.  J    Arr>t"   1     Arnt, 
V|D<ny  wopKIclob  vvopK 

lota  l 

Deductions 

Net 

Arrtfrd 

j« 

. 

1 

total  footings  of  the  pay  roll,  these  summaries  are  entered  in  the  back  of  the 
pay  roll  book  in  a  condensed  form  (see  form  No.  5)  ;  from  this,  very  useful 


sS 

<-irr}m<3r*y 

_o 

?  Pay 

/Q0//3     fnorri- 

* 

IS99 

fattePnDept  |  Inorj  fouodpy 

Dpaasfouoc/yfPcl  t-Doff^lMchne.Dcp. 

Aasmbln^ 

Total 

ftoccr 

t 

Day 

cJob  1  Day 

dob 

Day 

dob  1  Day 

dob       Day 

dob 

Day 

cJoL 

Day 

dob 

Day 

dob 

7 

, 

d 

I 

and  important  information  is  gathered.  The  comparative  cost  of  each 
department  is  readily  seen,  the  percentage  of  day  and  job  work  is  shown,  the 
latter  information  being  indispensable  in  figuring  the  cost  on  the  product  of 
the  plant. 

The  company  also  runs  a  commissary  department  in  connection  with  its 
business.  Commissary  checks  are  issued  to  the  employes  against  their  time, 
the  checks  used  are  small  pieces  of  cardboard  3x5  inches  (see  form  No.  4), 
which  are  numbered  consecutively.  When  a  check  is  issued  it  is  charged  on 
a  memorandum  book  and  posted  from  there  to  the  pay  roll  ledger  in  the 
column  marked  "Deductions,"  other  items  advanced  to  help,  such  as  cash, 
coal,  etc.,  are  also  entered  in  this  column.  These  several  amounts  deducted 
from  the  amount  earned  gives  the  net  amount  due. 

After  the  pay  roll  is  closed,  the  time-keeper  next  makes  out  a  ticket  for 
each  man,  showing  the  amount  earned,  deductions  made,  if  any,  and  the  net 
amount  due  him  for  the  week.  These  tickets  are  put  up  in  envelopes  and 
turned  over  to  the  foreman  to  be  distributed  by  them  to  the  men  in  their 
departments. 

The  next  step  is  to  prepare  for  paying  out  the  money.  For  this  purpose 
they  use  manilla  coin  bags  3x43^  inches  in  size. 

The  name  and  amount  is  first  plainly  written  on  the  upper  end  of  the 
bag,  the  money  is  then  counted  out  by  the  time-keeper  and  passed  over  with 
the  coin  bag  to  an  assistant,  who  recounts  it,  puts  it  into  the  coin  bag,  and 
seals  it  up.    After  thus  putting  up  the  money,  these  bags  are  laid  out  on  some 

9 


suitable  place  in  alphabetical  order.  When  the  hour  for  paying  off  arrives, 
Ihe  men  assemble  at  the  pay  window  of  the  time-keeper's  office  and  present 
their  tickets  for  payment.  After  comparison  with  the  coin  bag  as  to  name 
and  amount  and  getting  it  properly  receipted,  the  money  is  passed  out  to  the 


0 
1 

>0\i0\  .o|25[2s|2a|  2s|2^|  25 

25 
SO 

No  &A    F&aooKe  \4a.MGh.,3/99 

1 

The  Vir>i«infc3  PlapdwdPC  Mf<$  Co.. 

SO 

1 

—  Com/77'^s>ivoy  Z?epani^7e/?/  —~ 

SO 

1 

Drlivep  lo   ^IdhnSmim'     c<"OF»c/ep 

SO 

, 

"cW.  "~  Dollar  «or#\  of  merchandise 

s 

N&t  fa}/}3fr/=>a6/<?  — 

$  <^2S>        Ji  Jwjtho^-faymaifc* 

s 

- 

s\s\  S\s\t>\*\  -5|^|   -5 

s 

After  all  of  these  tickets  have  been  cashed,  they  are  filed  away  in  some 
convenient  place  for  reference  and  as  vouchers  for  the  money  paid  out  for 
labor. 

By  this  method  the  men  are  paid  off  every  Saturday  evening,  one  week's 
wages  being  kept  behind,  as  it  takes  this  length  of  time  to  make  up  the 
pay  roll. 

The  actual  time  consumed  in  paying  off  the  men  being  about  thirty  min- 
utes, this  system  was  practically  devised  by  the  writer  and  used  for  several 
years  with  satisfactory  results. — >S\  S.  Burch. 

PAY  ROLL,  SYSTEM  FOR  A  TANNERY. 

It  would  be  impractical  for  large  concerns,  having  many  employes  to 
keep  the  account  of  every  employe  on  the  regular  double  entry  ledger.  At  the 
same  time  a  system  must  be  kept  by  which  any  possible  errors  in  employes  can 
be  avoided.  The  following  is  a  system  which  is  now  being  used  by  a  large 
number  of  manufacturers,  and  although  one  may  call  it  double  entry,  it  is 
auxilliary  to  the  regular  set  of  double  entry  books.  The  system  is  com- 
prised of  only  two  extra  or  special  books.  One  is  the  employes'  time  ledger, 
and  the  other  is  the  coupon  register.  I  will  describe  the  former  as  follows: 
The  pages  are  numbered  in  folio,  that  is,  there  is  a  right  hand  page  and  a  left 
hand  page  for  every  twenty-five  employes'  accounts.     (See  cut  No.  I.)     At 


&93              MELLEN 

7S.\\7'UY 

AKZZ.Z>V 

W      IS99 

E.D9 

Nome 

3 

. 

■ 

-    | 

-  - 

' 

3u-sd»v  C-cd.tS 

. 

C<^-K  = 

i 

3 

4 

'. 

- 

M 

■7 

o 

9 

CM 

. 

- 

Lo 


the  left  of  the  left  hand  pages  are  written  the  employes'  names,  usually  in 
alphabetical  order.  The  space  to  be  given  for  each  name  should  be  about  nine- 
isixteenths  of  an  inch.  A  page  ten  by  eighteen  inches  should  hold  twenty-five 
names  or  accounts.  (The  names  are  rewritten  and  new  accounts  opened  with 
each  employe  every  month.)  The  balance  of  the  left  hand  page,  to  the  right 
of  the  names,  is  ruled  off  into  thirty-one  spaces  or  columns,  a  column  for  each 
day  of  the  month.  Then  each  employe's  space  is  subdivided  into  three  spaces 
by  horizontal  lines  of  a  different  color.  Into  the  top  the  time  is  entered.  Into 
the  two  lower  spaces  the  charges  are  entered. 

Whenever  a  company  store  is  operated  in  connection  with  other  business, 
a  coupon  system  is  a  simple  method  of  charging  employes  up  with  what  they 
may  purchase  in  any  one  month  at  the  store.  Instead  of  charging  up  the 
employes'  accounts  with  value  of  articles  purchased,  coupon  books  are  issued 
to  the  employes  in  sums  ranging  from  $2  to  $20.  These  coupon  books  con- 
tain slips  of  different  denominations,  which  are  good  in  trade  only  at  the 
store.  In  each  book  is  also  a  receipt  which  is  torn  out  when  book  is  issued, 
and  the  receipt  is  signed  by  the  employe  to  whom  the  book  is  issued.     (  See 


No  .^5Ci5_ 

$500 

Mclle^,    W,:-,    rw      17"  189.6- 
Pecei  ved  of  Fayette.     <S Kaw  6/Co, 
Coupon.  BooK  1o  ttAe   ornourCTof 

five  Dollars, 
Redeemable.   ir\  mepchardise. 

value  Received. 
Will     Podcjep^ory 


form  of  receipt.)  These  receipts  are  then  entered  into  the  coupon  registered, 
ruled  off  as  per  cut  herewith.  From  the  coupon  register  the  amount  of  cou- 
pons are  posted  to  the  employes'  accounts  in  the  time  ledger,  in  red  ink,  to  dis- 
tinguish the  coupon  charges  from  other  charges.  After  posting,  check  over 
all  entries.    In  the  journal,  make  an  entry  as  follows  : 

$274.00 ;  Pay  roll,  Dr., 

To  Coupon  account,  $274.00 

(Coupons  issued  5-4- '99.) 

Expense,    Dr $3,547  89 

Salaries,  Dr 46s  29 

Tanning  Labor,  Dr 7-3^6  67 

Bark  Labor,  Dr 422  06 

To  Pay  Roll  account,  Cr ' $11,761  91 

Suppose  that  you  have  paid  out  on  the  same  date,  in  cash,  to  different 
employes,  amounts  aggregating  $93.  Charge  pay  roll,  in  cash  book,  with 
that  amount,  and  post  to  general  ledger.  Also  enter  on  cash  book,  in  the 
explanation  column,  the  names  of  the  employes  who  drew  the  cash,  and  the 
amounts.    Post  these  from  cash  book  to  time  ledger,  in  the  column  which  is 

11 


same  date  as  entry  on  cash  book.  All  cash  charges  on  time  ledger  should  be 
preceded  by  the  letter  C,  and  all  journal  charges  by  the  letter  J.  The  total 
charges  in  any  one  column  in  time  ledger,  on  any  given  day,  should  corre- 
spond with  total  charged  same  day  to  pay  roll  in  the  cash  book  and  journal. 


300 


COO&O/V    £>£G/<5T~^/?-M£LLEN   72XNNC& 

MONTn   Or        May  '^ 


i  wKprrv  cKare^gc 


BorK   1  Cxpcnsc 
AccouKtlAccoW- 


The  first  money  column  of  the  right  hand  page  is  for  wages.  The  second 
column  is  for  sundry  credits,  or  for  balances  carried  forward  from  previous 
month.  Into  the  third  column  are  extended  the  total  charges  for  the  month. 
Into  the  fourth  money  column  is  carried  the  balance  due  each  employe  at  end 
of  month,  after  deducting  all  charges.  The  next  column  shows  when  balance 
was  paid.  If  paid  on  the  regular  pay  day,  the  initials  "P.  D."  are  inserted. 
If  paid  any  other  time,  insert  the  date.  The  last  column  is  for  remarks,  and 
into  which  should  be  noted  how  balance  was  disposed  of  .  After  the  time  is 
all  entered  on  time  ledger,  and  figured  and  carried  out,  then  all  charges  should 
be  extended  into  the  charge  column.  Then  carry  out  the  balances  into  the  bal- 
ance column.  Then  add  up  the  columns  on  the  right  hand  page  and  prove  as 
follows :  Add  the  first  column  to  the  second  column,  then  subtract  the  third 
column,  and  the  remainder  should  correspond  with  the  last  or  balance  col- 
umn. Then  the  footings  of  all  the  pages  of  the  same  month  are  grouped 
together  on  one  page  and  added  up,  and  proved  again,  as  above. 

The  aggregate  footings  of  the  first  column  of  any  month  constitute  the 
pay  roll  for  the  month,  and  the  footings  of  the  last  columns  constitute  the  bal- 
ance due  employes  on  account  of  pay  roll,  and  should  correspond  with  the 
balance  of  pay  roll  account  in  the  double-entry  ledger.  After  pay  roll  is  all 
complete  divide  up  the  different  labor  items,  and  make  a  journal  entry,  say  as 

above. 

*         *         * 

PIECE  WORK. 
Where  a  piece  work  system  is  adopted,  it  is  necessary  to  pay  the  strict- 
est attention  to  the  question  of  the  output,  as  the  workman  is  liable  to 
sacrifice  skill  and  careful  attention  to  his  work  for  rapidity  of  production  in 
order  to  complete  as  large  a  number  of  articles  as  possible  and  so  increase 
the  amount  of  his  remuneration.  Those  engaged  on  piece  work  are  also 
liable  to  be  careless  with  machinery,  tools  and  material  supplied,  sacrificing 
everything  to  the  end  of  securing  a  large  output.  Labor  unions  do  not, 
as  a  rule,  look  upon  piece  work  with  favor,  because  the  employer  bases  his 


12 


rate  for  piece  work  on  the  amount  of  work  performed  by  the  strongest  and 
most  expert  workman,  thus  rendering  it  impossible  for  the  ordinary  work- 
man to  gain  a  reasonable  living. 

Where  both  piece  work  and  day  work  are  employed  in  the  one  estab- 
lishment, it  is  useful  to  keep  a  record  which  shall  allow  of  a  comparison 

PIECE  WOFtK   ROCOFiD 


Pifoc  Wor>K 

Da>y  WorK 

D«ife 

Name    d? 
Wophmao 

A  i*>t">  o  1  c 

Co\*>T  pep 
A  pttc  1  e 

To1a| 
Cost 

Mps 

OiTe.   Am+ 

R-ncr,-ti,e 
P/eoeWonKv 
or-Day  VVorft 

PcmaoKi) 

DeicpiptTon 

No.  made 

J 

/ 

between  the  two  methods,  so  that  it  can  always  be  ascertained  which  is  the 
most  profitable  method  of  manufacture  of  any  given  article. 

*         *         * 

COMBINED  PAY  ROLL  AND  LEDGER. 

Accounts  with  laborers  form  an  important  part  of  any  system  of 
accounting  dealing  with  plantations.  A  combined  pay  roll  and  ledger 
should  be  adopted  which  will  save  all  the  trouble  of  keeping  individual 
accounts  with  laborers,  and  at  the  same  time  prevent  the  writing  of  names 
oftener  than  once  in  about  thirteen  weeks  instead  of  every  week,  as  is 


NlArne 

Nlo 

Bal. 

Dak 

Debi'fe 

Dafe 

GroeJrfe 

B* 

fbraw'd. 

Cash 

Mdse 

Tot  J 

Refcpntetc 

Wa^es 

T&kl 

top  wo 

7^ 

customary  on  most  pay  rolls.  A  combined  book  of  this  kind  is  arranged 
on  the  tabular  system  as  per  the  following  illustration :  The  laborer  is 
given  by  the  superintendent  a  ticket  each  day  for  value  of  work  done,  and 
vhis  ticket  he  can  exchange  for  cash  at  the  company's  office,  or  for  mer- 
chandise at  the  company's  store.  The  book-keeper  posts  the  debits  from 
these  tickets  and  files  them  away  for  reference.  The  superintendent  keeps 
an  account  of  all  tickets  issued  and  at  the  end  of  the  week  makes  a  return 
o"f  the  total  wages  earned  by  each  man,  duly  O.  K.'d,  from  which  the  book- 
keeper posts  the  wages  credited  to  the  pay  roll  and  ledger. 

The  books  should  be  ruled  so  that  two  weeks  can  go  on  left-hand 
pages  and  three  weeks  on  rieht-hand  pages.  Then  insert  as  many  cut,  or 
narrow  leaves  (without  name  and  number  columns)  as  may  be  considered 
practical,  the  books  thus  running  for  as  many  weeks  as  desired  without 
rewriting  the  names. 

13 


TIME  RECORD  SYSTEM  FOR  A  FACTORY. 

Each  workman  is  furnished  with  a  cost  card  i  Fig.  3),  on  which  he 

records  particulars  of  time  consumed  and  material  used  on  the  contract, 

or  job,  on  which  he  is  engaged.     When  the  job  is  completed  this  card  is 

turned  in  to  the  cost  clerk,  who  figures  out  on  it  the  cost  of  material,  labor 


(cost  cadd  r/0^3) 
Name  orernployc 


the  AMERICAN    MANUFACTURING  CO., 
No 


.5Kop 

Mertepieil 
oct" 

Tirne 

Quantity 

Dept 

Ma~fepial 

used 

Pi».me 
CO£>"t~ 

Labors 

/ 

and  sundries  and  enters  it  on  the  Cost  Record  of  Summary  (Fig.  4).  A 
separate  page  is  allotted  to  each  contract  or  job,  and  the  total  cost  of  same 
ascertained.  This  amount  is  then  posted  to  the  contract  account  in  the 
ledger,  which  is  credited  with   contract  price,   the  difference  being-  the 


jFic:- 

a 

COST 

vSUMMARY 

Da"fe 

Coat 
C<=,r>d  No 

Name,    of 

WoraKrnaru 

Dep+ 

Qupistrly 

CWirr\e 
Cost 

Labon 

Sundries 

folio 

Ccot~ 

1 

Where  certain  staple  articles  are  manufac- 
tured a  comparative  statement  of  cost  of  manufacture  should  be  main- 
tained, in  order  to  ascertain  that  such  costs  are  not  excessive  or  exceptional 
in  any  way. 

In  Figure  5  we  show  a  form  of  Pay  Roll  Book,  the  particulars  of 
which  are  obtained  from  the  Time  Recorder.    If  the  Pay  Roll  Book  is  com- 


ric.  .3 

PAY 

DOLL. 

E>OOK 

Nl<=>rr\e. 

M 

T 

W 

Th 

r 

Tb-tel 

~TTrT\e 

Parte 

J  A   ,               .[Balance 
ArnourV|  Advanced  |    ^j. 

Ffe»i<  1 

, 

2 

0 

'-'■ 

•■ 

■  \ 

.1 

■  ■ 

5 

pared  with  the  workmen's  cosl  cards  a  very  good  check  is  obtained  on  the 
total  time  reported. 


n 


Some  establishments  still  have  their  employes*  sign  the  pay  roll,  but 

where  the  hands  are  very  numerous  this  is  found  laborious  and  inconven- 
ient, besides  exposing  to  the  view  of  the  person  signing-  the  amounts  paid 
to  others. 


Cioe)  wxieveuc 

Ti-ie  AMERICAN   MANUFACTURING  CO. 


CA3Mlga. 

or.....  7... ::::. 

m  \r\  payTTNerst-oT  wa^«  duaas  follow*: 

Monday , _  _  .  Kou»» 

Wedne-aday^ 

TKuP&day „ • 

Satonday  .  j. _          » 

"Tc>fel    ....   ........  Kour>* 

- £>up* 

QECEiveD  ofTKe  Arr\er°icar\M^afe^p^Co1rSe<sk>ove 
^n\ourtf-'.nlLll  ofal!  cl&irr\a>  "fry^ doycT _.  1DOO 

(^i^ncJto^c).... 

Fig.  6  shows  a  very  good  form  of  combined  wages  card  and  voucher, 
which  can  be  used  with  advantage. 

*         *         * 

FACTORY  TIME-KEEPING. 
Where  an  employe  is  engaged  an  employes'  record  card  (Form  I.)  is 
made  out  and  filed  away  in  an  alphabetical  index,  he  being  instructed  to 


..— *£r'L-rrcA-  w 


«y.-  <-?„o-  -h  one. 


notify  the  time  clerk  should  he  change  his  address.  When  any  change 
occurs  in  his  relation  to  the  company  it  is  noted  on  this  card.  In  the  case 
of  a  former  employe  applying  for  a  re-engagement,  the  information  thus 
recorded  will  often  be  found  of  great  value.  In  an  emergency  it  is  also 
frequently  valuable  to  have  easy  access  to  the  addresses  of  employes. 


t/-*g  *mc<3  aro     time  aoat  nccoflo  jMfir 

L    J-..,-,   ..   ., 

Ov^tr-n^. 

~T,rr\e 

r  , 

■r 

Irx 

.'....1 

Irl 

'*.* 

Tofel 

RiWK 

■.,.  ,-.f 

^ 

.-_,. 

120 

l.oo 

,-, 

,,, 

A'U 

■a% 

a 

e  si  i 

1201 

ISO 

•  •   3 

I     :, 

lis- 

a 

& 

u 

3 

730 

,203 

ICO 

ei  i  • 

&U 

©•/» 

A  % 

SB 

io'/i 

2e7a 

roof 

,,       ■ 

-.    , 

- 

-.•  •■:' . 

""* 

The  time  of  all  employes  is  recorded  by  themselves  on  entering  and 
leaving  the  factory.     For  this  purpose  two  register  time  clocks  are  provided, 


in 


one  for  employes  who  are  paid  wages,  and  one  for  all  others.  On  removing 
the  record  sheets  (Form  II.)  from  the  clocks  in  the  morning,  that  for  the 
salaried  employes  is  simply  placed  on  file  for  information  of  those  to  whom 
such  employes  are  responsible. 

On  the  record  sheet  from  the  other  clock,  the  full  amount  of  time  as 
shown  by  the  record  is  extended  into  the  column  headed  total  time.  The 
amount  of  such  time  as  has  been  spent  on  piece-work  being  ascertained  from 
the  factory  clerk  (as  described  later)  is  entered  in  the  piece-work  column, 


TMe    „  a  CO  ltd 

m 

akf 

Mo 

ntft. 

E 

'■:- 

Si  t 

/  °' 

N. 

M— 

5h« 

Day 

','.;:: 

33c- 

IW.K. 

D..TJ.,k»J'W,    bv    Stap, 

<e 

A 

.:, 

J.% 

., 

... 

P^rtr-r, 

M=cJ,..-»= 

T'''  ! 

^ 

InicUoi^aI 

e> 

" 

■ 

• 

' 

" 

' 

■ 

' 

'Z 

,:.., 

"" 

•° 

* 

" 

»+ip  S<^ 

!3 

so 

—   ia 

i_ 

« 

-,.. 

£ 

JS 

LaJ 

..- 

J3C 

and  the  difference  between  the  two  extended  into  the  column  for  day  work. 
The  time  in  this  column  is  entered  into  the  wages  book  (Form  III.)  each 
day,  it  having  first  been  checked  with  the  factory  clerk's  day-work  tickets 
and  daily  time  sheet  in  order  to  ascertain  that  all  time  credited  to  the  work- 
man has  been  charged  out  against  some  factory  order.  The  total  and  piece- 
work time  being  added,  the  difference  should,  of  course,  correspond  with 
the  total  of  the  outside  or  day-work  column.  If  a  workman  is  allowed  to  go 
out  on  his  own  business  during  working  hours  he  is  given  a  pass  (Form 
IV.)  by  his  foreman,  indicating  the  time  he  stopped  work.    The  door  being 


Ocp 
To 

A 

Tir7\c*Keepe 

„ 

CO 

crcdfcr\£  *tr^e     "to  bo 

_,r>    punchrd 

f  f  SV*1—      " 

r..  ...., 

l-~tR-o.  •-.<* 

Aftconoorv 

^W 

Oc-te-o-J 

Ow.f 

Q«.tu..n-d 

. 

, 

. 

,  . 

. 

. 

.]-. 

•1- 

.... 

B 

Id 

. 

. 

. 

. 

,. 

, 

,, 

, 

,.,. 

:■ 

.■: 

-'"■ 

SO 

L2 

,1    .-KJ 

,- 

IS 

ac 

•ii 

':. 

■K- 

so  arranged  that  he  has  to  pass  the  time-keeper's  desk  to  leave  the  building. 


he  gives  hi 


to  the  time-keeper  and  upon  his  return  reports  himself  as 


he  passes  in.  The  time  he  lias  been  out  is  noted  on  his  pass,  and  is  deducted 
from  the  time  passed  to  his  credit  through  the  wages  book  for  that  day.  If 
he  goes  out  on  the  linn's  business  he  is  given  an  outward  time  card  indicat- 
ing the  time  he  leaves  the  shop,  and  having  the  number  of  the  order  upon 
which  his  work  outside  is  required.  This  he  leaves  with  the  time-keeper. 
(  In  his  return  he  receives  this  card,  which  he  returns  to  his  foreman  in  the 
usual  course.    The  time-Jceeper  thus  has  either  a  pass  or  an  outwork  time 

16 


card  in  his  possession  for  each  workman  during  absence  from  the  shop.  It 
will  be  seen  that  every  alternate  page  of  the  wages  book  is  a  flyleaf;  this 
enables  one  writing  of  workmen's  names  to  suffice  for  two  half  months. 

The  keystone  of  factory  accounting  is  a  rigid  adherence  to  the  rule 
that  no  work  shall  be  put  in  hand,  expenditure  incurred  or  goods  or  material 
delivered  without  written  authority  emanating  from  the  office,  and  that 
all  papers  and  records  referring  to  or  recording  such  work,  expenditure,  or 
delivery,  must  bear  the  number  of  the  order  authoizing  the  same. 

On  receipt  of  card  from  factory  clerk  and  material  from  stores,  the  fore- 
man of  the  department  puts  the  order  in  hand  at  once.     He  issues  a  time 


Ch 

7„    Mj*uu.ra^^                         0„^,„NJ„ 

c5*+*. 

Of».o»l*. 

mo,„;^ 

AttE-noo^. 

5«*p-"- 

Bc4 

,r.n..»i>.d 

&=< 

...-. 

r,,,, 

»K=d 

S  T-= 

. 

•„ 

|f 

;. 

,v 

.,. 

, 

^^ 

J    ^ 

,., 

. 

A 

n 

36 

■ar, 

.j 

, 

,,. 

,  -. 

.. 

, 

, 

s 

v 

*. 

-. 

-..-. 

•  1'. 

,1 

■ 

, 

.. 

<- 

(O 

Ch«  =  K                                          '    D„pt.                           '            Ord.»  Mo. 

r,^^iO.™m»*a«   13                    ""„*  ZZZ*'o*t>Z*T~:*   J^o^" 

D-+i                                                                                     3Vr,rJ 

3  £?hLm 

■s*f">    "J* 

Afr^^ooor^         ^ 

^   -r,i,«. 

2 

.4 

,. 

.... 

z 

,., 

V 

A-. 

SO 

/■s|  1 

■5 

-'■ 

-10 

S 

■\ 

V 

,. 

" 

, 

J- 

■I 

: 

.. 

. 

■>>-.  -• 

ac 

■V 

;^.M. 

" 

L5 

'*"- 

"' 

"■ 

'■'' 

J' 

''- 

1 

. 

v., 

., 

,. 

,ip~ 

.. 

--■- 

fit 

- 

,. 

V 

-■■: 

w 

•• 

■>. 

*a\e 

• 

SO 

CK 

me™ 

'" 

'- 

..,,,.- 

T««  oaoo 

Mor-r,,r.o<. 

A  f+c^ooo-. 

Fi.W)\R*li 

'e>c 

o«^ 

rw»K*J 

B«5j9<ir» 

F*l^,«h«d 

.- 

io 

;. 

., 

. 

,., 

Jt 

,. 

I   ., 

, 

3    T,rrv«. 

a 

n 

j 

1? 

.. 

,  , 

... 

-, 

, 

. 

. 

... 

., 

. 

., 

,   . 

, 

-, 

r 

, 

,. 

^ 

. 

,, 

l 

. 

p 

. 

. 

.. 

. 

!  « 

. 

, 

,, 

^_ 

ac 

•!•■ 

^ 

,, 

,, 

... 

^ 

. 

., 

1; 

. 

CtucK                                          I                                            0"(fe»  No 
C3  e+c          ~                                                      S.'pnt-J 

t^lonn.ry* 

Att^noo^ 

3  &~£~ 

o~+ 

■-  («.1 ,..,! 

o^-t-  ■ 

i  J 

B+w»„-J 

_, 

, 

in 

J. 

_j_ 

f. 

, 

,r 

. 

. 

.. 

, 

4i 

<|     T.r„ 

,, 

n 

,, 

,., 

R- 

,  , 

, 

. 

. 

,  ^ 

. 

,  . 

„ 

, 

1 

. 

, 

4.  ■ 

|n 

. 

4 

., 

.. 

,  . 

^) 

, . 

, 

, . 

(. 

a*!.  I 

,  ^ 

,, 

, 

. 

. 

liti 

, 

1^ 

,  ^ 

, 

13 

Vv 

.J', 

card  (Form  XXI.  to  XXIV.)  to  the  workman  to  whom  he  allots  the  job, 
first  noting  thereon  the  order  number  and  the  date.  With  his  private  punch 
he  indicates  the  hour  at  which  work  is  begun  on  the  order  in  question. 
When  the  workman  finishes  the  operation,  or  is  put  upon  another  job,  lie 
returns  the  card  to  the  foreman.  The  latter  punches  the  time  at  which 
work  was  stopped  on  that  particular  order.  The  only  writing  the  workman 
is  called  upon  to  do,  is  to  fill  in  the  space  headed  "Nature  of  Work,"  and 
sign  his  name.  In  a  great  many  instances  it  is  not  necessary  to  specify 
nature  of  work  done,  as,  particularly  in  the  manufacture  of  stock,  the  work- 
man's name  is  sufficient  to  indicate  to  the  office  staff  the  nature  of  the  work 
done  by  him. 

The  time  cards  in  possession  of  the  foreman  are  of  four  kinds,  each  of 
a  distinctive  color,  namely,  day-work,  piece-work,  premium-work,  and  out 
out-work.  The  ruling  is  practically  the  same  on  all  cards,  and  as  far 
as  both  workman  and  foreman  are  concerned,  no  more  clerical  work  is 
necessitated  by  one  than  the  other. 


17 


On  the  premium  time  card  the  foreman  fills  in  the  time  allowed,  and 
with  that  exception  the  cards  are  treated  exactly  the  same.  It  will  be  seen 
that  all  responsibility  for  the  correctness  of  his  time  card  is  off  the  workman, 
and  put  where  it  properly  belongs — on  the  foreman  of  the  department. 
The  latter  is  responsible  for  the  time  card  bearing  the  correct  number,  and 
showing  the  actual  amount  of  time  expended  upon  that  number.  Under 
no  circumstances  is  the  workman  allowed  to  begin  another  job  until  he  has 
returned  to  the  foreman  the  card  previously  used  by  him  and  obtained 
another  with  his  starting  time  for  that  job  punched  unon  it.  If  a  man  is 
taken  off  a  job  and  goes  back  again  to  work  on  the  same,  he  gets  a  new  card 
each  time. 

The  back  of  the  cards  may  be  used  for  any  remarks  either  the  workman 
or  foreman  may  wish  to  put  on  record  concerning  either  the  work  done  or 
time  expended. 

As  regards  the  premium  time  card,  the  system  of  paying  wages  com- 
monly called  the  •'premium  plan,"  may  require  a  little  explanation.  To 
those  interested  in  the  question,  and  desiring  to  study  the  plan  in  the  light  of 
actual  recorded  results,  I  would  recommend  a  number  of  articles  under  the 
heading  "Premium  Plan,"  which  appeared  in  the  American  Machinist  at 
different  times  during  the  past  two  years.  Briefly  put  the  idea  of  the  plan 
is,  after  ascertaining  from  past  records  how  long  it  has  taken  to  produce  a 
given  article,  or  complete  a  given  operation,  to  offer  the  workman  a  pre- 
mium or  additional  wage  upon  such  time  as  he  can  save  on  the  same  work. 
If  past  records  show  that  certain  work  has  been  repeatedly  done  in  ten 
hours,  it  is  clear  that  if  the  workman  can  be  induced  to  do  the  same  work, 
or  produce  the  same  quantity  in  say,  nine  hours,  a  saving  has  been  effected, 
and  the  idea  is  to  allow  the  workman  to  share  in  that  saving.  Suppose  the 
employe  is  to  be  paid  at  the  rate  of  20  cents  per  hour,  if  he  is  offered,  say 
one-third  of  that  amount  for  each  hour  saved,  he  will  see  that  his  employer's 
interests  and  his  own  are  identical.  It  is  really  offering  the  workman  that 
most  powerful  of  all  inducements  to  increase  his  output,  namely,  self-inter- 
est. Those  who  have  had  long  experience  with  this  plan  claim  it  is  the 
only  system  whereby  increased  wages  to  the  workman  mean  reduced  costs 
to  the  employer. 

From  time  to  time  .luring  the  day  the  time  checks  returned  to  the  fore- 
man are  collected  by  the  factory  clerk.  From  the  time  punched  he  calcu- 
lates the  time  expended  and,  tilling  in  the  workman's  rate  per  hour,  extends 
it  into  space  for  value.  On  piece-work  cards  he  simply  marks  the  time 
ncled  and  does  not  extend  any  value.  The  cards  are  kept  sorted  by 
workman's  number,  and  entered  on  the  daily  time  sheets  (Form  WW). 
These  sheets  are  ruled  into  convenient  spaces  to  hold  for  each  man  a  record 

18 


of  his  time  as  shown  by  his  time  cards,  and  the  value  of  such  portion  of 
time  as  was  expended  on  day-work.  The  piece-work  time  being  entered 
in  the  same  space  in  red  ink,  it  is  a  simple  matter  to  keep  the  two  from  con- 


C/c»A-  ft  If" 

To-  ~ch  -~.fi 

/ok"  -  f»» 

fusion.  The  last  cards  for  the  day  are  taken  up  by  the  foreman  at  15 
minutes  before  closing  time,  and  by  him  punched  and  sent  to  the  factory 
clerk. 

The  first  thing  in  the  morning  the  factory  clerk  takes  the  time  cards 
and  time  sheets,  and  gives  the  time-keeper  the  amount  of  piece-work  time 
for  each  workman.  This  is  entered  upon  the  clock  record,  and  deducted 
from  the  total  time  as  previously  described.  All  day-work  credited  to  any 
employe  has  now  been  accounted  for  under  some  factory  order  number. 

As  regards  piece-work,  except  in  very  large  shops,  it  is  quite  practi- 
cable to  pay  a  workman  for  all  piece-work  done  up  to  pay  day,  instead  of 
following  the  usual  plan  of  paying  him  a  certain  proportion  (usually  two- 
thirds  of  his  day-work  rate),  and  carrying  the  balance  over  to  next  pay. 
Each  foreman  is  supplied  with  a  piece-work  book  (Form  XXVI.).    On  the 


NOi,,      "*"> 

.co.r^.^r.ctr.^ 

txrBroon'T^M. 

"The    Tbllo—o^baabeer,  placed  fe  yow  Oedit" 

Ouaritoy 

Of^.-tTon 

(=>-..  <=.« 

\/al„<^ 

/ 

11 

D^- -      -ir-J  — TGsssz- 

W.in  P'eo. 

Ondeio  N<fc 

ChecK 

Oo<,-,t.Ty 

op"**-'"- 

R.,C» 

Value 

./ 

y 

ii 

B*te 

^"'J k=k.— 

j 

n 

z 

1 

0 

e 

i 

0 

6 

a 

i 

stub  he  takes  a  memo  for  his  own  information.  Both  original  and  duplicate 
in  this  book  are  perforated,  and  as  the  work  is  inspected  and  passed  as  cor- 
rect, the  foreman  removes  them  both  from  his  book,  and  gives  the  duplicate 

19 


to  the  workman.  The  original,  which  is  of  a  different  color,  goes  to  the 
office  and  is  extended  and  posted  to  the  cost  sheet.  These  piece-work 
slips  are  kept  sorted  by  workman's  number  until  after  the  next  pay  day, 
when  they  are  made  up  and  posted  to  the  credit  of  the  workman ;  they  are 
then  sorted  by  order  number  and  are  filed  away  with  other  papers  con- 
nected with  the  same  order.  It  will  be  noted  that  while  original  and  dupli- 
cate contain  the  same  information,  the  printed  matter  is  entirely  different, 
so  by  no  possible  means  can  the  duplicate  be  used  to  draw  pay  the  second 
time,  for  work  done. 

At  first  sight  it  would  appear  as  though  the  system  of  a  different  time 
card  for  each  job  would  result  in  so  many  papers  that  the  records  would  be 
too  bulky  to  be  quickly  and  accurately  handled.  If  it  were  necessary  to 
leave  the  collecting,  sorting,  pricing,  and  extending  of  all  time  cards  until 
the  close  of  the  day  it  might  be  found  so.  Collecting  them  frequently 
during  the  day  and  keeping  them  sorted  by  workman's  number  and  priced 
and  extended,  it  should  only  take  a  very  short  time  to  check  them  with  the 
clock  records  the  next  morning.  This  having  been  done,  the  tickets  should 
be  sorted  according  to  order  number,  and  it  will  then  be  found  that  they 
can  be  posted  to  the  cost  sheets  in  less  time,  and  much  more  accurately  than 
if  several  numbers  were  on  one  card.  Besides  putting  the  responsibility  for 
the  proper  order  number  and  correct  time  upon  the  foreman,  the  system  of 
a  single  ticket  for  each  order  takes  from  the  workman  all  opportunity  to 
either  "cook"  his  time,  or  enter  as  day-work  time  which  he  has  actually 
spent  upon  piece-work,  so  getting  paid  twice  for  his  labor. 

PAY  ROLL  SYSTEM  FOR  A  LUMBER  CORPORATION. 
The  laborers  are  employed  in  different  ways,  sometimes  spending  part 
of  a  day  in  one  department  and  the  remainder  in  another.   They  also  obtain 


No.../ Mon#7_       Mc/i       Z><3 l©o.o_. 

Nlarne  _  .IdCM^f^JBis. MaroK    />< 

F^TZICC 

^panch  J^^lo. >3_ecffoo    KIo 

^Z<D    «£ 

J/a 

1 

■2, 

3 

^L 

5 

e 

■7 

e> 

e> 

1 

0 

v50  «=■ 

'/a 

1 

2- 

3 

A- 

-5 

e 

-7 

& 

© 

i 

0 

^lo.__J_ Mon.'tri  ^/V^^y^cA-                     .    ie>o<o_. 

NJa>rr?e  _  JV-_/)/toi?£Pjl^ 

Tr?e    fu£uroe£>    punched    show  you  t??e    Q<L/rT?b>er>     of 
t?bee.&       you    l-7<ave     cii-ft"  "to-c^y 
Counted     b  y  _  _  _/"!/• -C-/0/2 c -s Ma>r^K    __^2\ 

Pnice 

Dpaoch    Mo.  /Z                      S^cti'ori      r-sJo.     <3XT 

4o  <* 

'/^ 

1 

2, 

3 

>4 

£> 

e 

~7 

& 

© 

1 

0 

v505* 

'/a 

1 

^-> 

3 

^4 

.5 

e 

-7 

e> 

s> 

1 

0 

20 


advances  of  cash,  and  purchase  merchandise  at  the  camp  store.  It  is 
necessary,  therefore,  to  have  a  special  pay  roll  book,  or,  as  it  is  called,  a 
''Hands  Ledger,"  an  illustration  of  which  will  be  found  under  the  heading 
of  Pay  Roli.  Each  workman  is  furnished  with  duplicate  tickets — one  for 
each  department  in  which  he  works.     On  this  ticket  the  foreman  punches 


Mo / Name (^JL  C^JTi^^rt. 



MP..if  kfct///&j72& At,  _  ^_ 

^_ 

Morjtt^ .  _M<^r^h  ^J.<£--/£>-OC> 

o^v.  ^r 

RAT&    RER     D.AV 

1 

3/4 

'/» 

'/a 

'A 

0 
0) 

0 
0 

5 

10 
0) 

0 
"0 

0 

J© 

* 

# 

# 

* 

No../. Name,  __  xiA -C/J^j^^n 

The  pur?cK  iq  Tr7i£>    jioKet"'  >f>how,s    you    tfce 

<3m,- 

o lj rit"  of  iuTie    you  h^ve  rn^cle  "today    wfffxj  . 

L.__. 

Morfffe__7Va^._/^'^  &Q.Q- 

C3^k  ^i"* 

«.A-r-E.    F=&F?     nD>o,-v' 

1 

3/4- 

'/a 

'/a 

«/* 

0 

0) 
0 

0 
0 

5 

<0 

0 
"0 

# 

* 

# 

_^__ 

«: 

the  time  occupied  on  the  job,  so  that  the  laborer  is  always  in  a  position  to 
check  up  the  settlement  of  his  account  by  the  time-keeper.  We  append 
samples  of  these  duplicate  tickets. 

The  originals  of  these  tickets  go  to  the  time-keeper,  from  which  he 
makes  up  his  records. 


PAY  ROLL  SYSTEM  FOR  A  MINING  CORPORATION. 

The  company  employs  about  i  ,200  to  1 ,500  natives  and  60  to  70  Amer- 
icans, the  latter  being  foremen,  mechanics,  clerks  and  heads  of  departments. 
The  pay  roll  accounts  for  the  natives  are  kept  by  the  Tienda  de  Raya  (mean- 
ing a  store  where  merchandise  is  advanced  against  time  tickets;.  The 
Tienda  de  Raya  conducts  also  what  is  called  a  Prestimo  office  (cashier's  or 
pay  office),  where  labor  time-keepers  and  Prestimo  cashier  are  employed. 

21 


It  also  conducts  several  branch  stores  which,  however,  are  cash  stores.  All 
merchandise  invoices  and  freights  for  the  Tienda  are  charged  to  it  direct 
when  paid,  as  also  all  cash  advanced  it  for  use  in  the  Prestimo  office.  At  the 
end  of  the  quarter  the  Tienda  de  Raya  is  charged  with  administration  ex- 
penses and  accrued  profits.  The  Tienda  schedules  its  pay  rolls  in  what 
might  be  termed  a  distribution  journal,  showing  amount  of  each  class  of 
labor  chargeable  for  the  month  to  each  mine,  each  department  or  each 
account.  This  book  when  written  up  at  close  of  month  is  turned  in  to  the 
general  office,  when  Tienda  de  Raya  receives  credit  for  total  amount  of  pay 
rolls,  also  for  the  personal  accounts  of  American  employes. 

At  the  close  of  the  month  a  pay  roll  is  made  up  in  the  general  office  for 
all  American  and  salaried  employes.  There  being  no  banking  facilities 
whatever  here,  these  employes  leave  the  balance  of  their  earnings  with  the 
company,  each  one  has  an  account  and  is  furnished  with  a  pass  book. 
Employes  having  balances  are  permitted  to  draw  cash  at  will  during  the 
month,  and  all  are  allowed  store  accounts.  These  cash  items  (including 
checks  and  drafts)  are  debited  in  detail  during  the  month,  and  at  the  close 
of  the  month  the  various  acounts  are  charged  with  their  respective  store 
accounts  and  credited  with  salaries. 


PART  IX. 


The  Voucher  System. 


The  Voucher  System* 


A  SYMPOSIUM  FROM  "THE  BOOK-KEEPER. 


THE  Voucher  System  (so  called)  consists  of  a  record  of  accounts  pay- 
able, arranged  ith  columns  for  the  distribution  of  purchases  to  their 
proper  departments ;  a  record  of  the  payment  of  such  accounts ;  and 
a  form  of  voucher  which  accompanies  the  payment. 

The  Voucher  Record  (or  record  of  accounts  payable)  is  not  used  in 
all  respects  in  the  same  way  as  a  purchase  record,  for  the  reason  that  where- 
as a  purchase  record  is  usually  devoted  to  a  record  of  goods  purchased,  the 
voucher  record  covers  not  only  goods  purchased  but  expenditures  of  what- 
ever nature. 

In  the  cash  book  a  column  is  provided  on  the  credit  side  for  "Vouchers 
Payable,"  and  the  payments  entered  in  the  cash  book  are  posted  to  the 
voucher  record,  the  check  number  also  being  given.  It  is  one  of  the  es- 
sentials of  this  system  that  all  payments,  no  matter  how  small,  be  paid  by 
check. 

An  account  called  "Unpaid  Vouchers'  account"  is  opened  in  the  general 
ledger,  to  which  the  total  of  vouchers  issued,  as  per  the  voucher  record,  is 
posted  at  the  close  of  each  month.  The  total  of  the  "Vouchers  Payable" 
account  in  the  cash  book  is  posted  at  the  close  of  each  month  to  the  debit  of 
this  account,  the  balance  showing  the  amount  of  vouchers  outstanding  and 
unpaid. 

For  every  entry  in  the  voucher  record,  or  series  of  entries  for  one  con- 
cern, a  numbered  voucher  is  made  out,  and  these  vouchers  are  kept  in  a 
file  until  taken  out  for  payment.  After  payment  the  voucher  can  be  filed 
away  in  alphabetical  or  numerical  order,  whichever  method  may  be  found 
most  convenient  to  the  business.  The  bills  referred  to  on  the  voucher 
should  be  attached  to  same  prior  to  filing. 

When  vouchers  are  filed  numerically,  the  following  is  an  excellent  plan 
for  keeping  tracks  of  same  and  affording  a  ready  reference.  File  the  vouch- 
ers in  packages  each  month ;  use  an  ordinary  index,  but  have  it  ruled  with 
columns  for  each  month  of  sufficient  width  to  accommodate  the  voucher 
numbers ;  then  index  all  the  vouchers  filed  away  each  month,  thus :  J.  O. 
Johnson  &  Company  would  be  indexed  Voucher  No.  163  in  April;  462  in 
June ;  520  in  July,  etc 

The  voucher  itself  should  be  arranged  so  that  it  bears  on  its  face  the 
following  endorsements : 


O.  K.  of  shipping  department  that  goods  have  been  duly  received. 

O.  K.  of  purchase  agent  that  prices  and  terms  are  correct. 

O.  K.  of  book-keeper  that  extensions  are  correct. 

O.  K.  of  Auditor. 

And  finally  O.  K.  of  President  or  Secretary  for  payment. 

While  this  involves  a  certain  amount  of  extra  work,  the  system  fur- 
nishes a  complete  check  upon  the  accounts  payable  of  a  business,  and  if 
carried  out  properly,  practically  renders  it  impossible  for  anything  to  be  paid 
out  for  goods  which  have  not  been  received  or  paid  twice  or  paid  without 
authority. 

A  great  many  Corporations  now  combine  voucher  and  check  in  the  same 
form  by  adding  the  following  paragraph  : 

When  this  voucher  is  signed  by  the  Treasurer,  and  countersigned  by  the 

President  of  the ,  and  receipted  by  the  Payee,  it  becomes 

a  draft  payable  at  the  First  National  Bank  of 

(Sig.  of  President.)  (Sig.  of  Treasurer.) 

When  the  voucher  register  is  properly  arranged  with  distribution  col- 
umns, the  distribution  on  the  back  of  the  voucher  is  unnecessary. 


Vouchers  and  Their  Uses* 


THE  greatest  importance  attaches  itself  to  any  system  of  book-keeping 
error  or  dishonesty,  and  minimize  the  opportunities  for  mistakes, 
which  will,  in  itself,  add  to  the  security  of  business,  prevent  loss  by 
Any  receipt  for  moneys  paid  which  it  filed  for  future  reference  is  a  voucher ; 
but  tb^  adaptation  of  the  term  by  business  houses  of  the  present  time  to  a 
special  character  of  receipt,  which  shall  at  the  same  time  of  acknowledge- 
ment of  the  payment  specify  the  particular  purpose  for  which  the  money  was 
paid,  either  with  or  without  the  original  bills,  and  which  shall  be  numerically 
arranged  for  ready  reference,  has  changed  the  real  meaning  of  the  term,  so 
that  it  now  implies  a  receipt  embodying  the  above  features. 

That  the  voucher  system  is  a  benefit  to  the  business  man  is  clearly  shown 
by  the  fact  that  it  has  been  adopted  by  the  United  States  government,  by  all 
railroads  and  express  corporations  and  by  thousands  of  other  large  corpor- 
ations and  private  companies. 

The  chief  use  of  the  voucher  is  to  facilitate  the  auditing  of  accounts,  and 
by  rendering  this  task  easy  and  accurate  to  prevent  the  falsification  of  books, 
either  by  the  dishonesty  of  the  employer  or  the  employe.  Its  secondary 
importance  is  to  preserve  a  file  of  receipts  that  may  be  reverted  to  at  any  time 
after  the  transaction,  to  prove  payment ;  and  to  have  them  uniform  in  size, 
plain,  but  fully  explicit,  and  so  filed  that  they  may  be  easily  found  at  a  mo- 
ment's notice. 

The  United  States  government  goes  to  the  extreme  in  its  complicated 
system  of  vouchering,  but  the  government  is  noted  for  its  red  tape  in  all  of 
its  departments,  consequently  a  radical  departure  in  its  system  of  payments 
is  not  to  be  looked  for. 

The  government  has  (in  its  department)  a  system  of  duplicate  and 
triplicate  vouchers  upon  which  is  enrolled  each  separate  item  of  the  purchase, 
and  all  circumstances  connected  therewith.  When  ready  these  vouchers  are 
sent  to  the  firm  or  individual  in  whose  favor  they  are  made  and  must  be  O. 
K'd,  receipted  and  returned,  before  any  payment  is  made  thereon.  Thus 
the  government  holds  their  receipt  before  payment.  A  check  is  sent  for 
these  receipted  vouchers  in  due  course  of  time,  and  a  receipt  is  also  required 
for  the  check.  The  original  bill,  or  bills,  or  supplies  represented  by  the 
voucher,  after  being  properly  attested  correct,  are  attached  to  the  duplicate 
voucher,  and  thus  permanently  filed. 

It  is  manifestly  impossible  in  a  limited  article  upon  this  subject  to  take 
up  the  many  variations  in  the  form  and  matter  used  upon  vouchers,  as  they 
differ,  according  to  the  character  of  the  business  and  the  various  exigencies 
of  approving  and  auditing,  but  in  some  of  its  many  varied  forms  the  voucher 
is  now  in  use  by  most  corporations  and  its  mission  is  rapidly  becoming  uni- 
versal, as  its  advantages  make  it  a  business  necessity,  and  outweigh  all  con- 
siderations of  extra  labor  and  expense. 

In  a  matter  of  such  universal  importance  to  business  interests,  it  is 
directly  in  order  (as  the  system  is  here  to  stay)  to  ask  what  is  the  most 
desirable  form  of  voucher  to  use,  in  order  that  it  may  answer  all  purposes 


for  which  it  is  designed.  That  these  purposes  may  be  made  clear  I  will 
define  and  explain  them : 

First — A  voucher  is  a  receipt  for  a  payment  of  money. 

Second — It  is  a  document  designed  to  show  definitely  for  what  purpose 
such  payment  is  made. 

Third It  is  made  uniform  in  size  and  shape  so  that  it  may  be  filed  in  a 

manner  to  make  it  easily  obtainable  at  a  moment's  notice. 

pourth It  is  consecutively  numbered,  in  order  that  it  may  be  used  to 

advantage  in  auditing,  and  the  number  of  the  voucher  should  invariably  pre- 
cede the  entry  of  payment  in  the  cash  book. 

Fifth— It  should  be  properly  approved  for  payment  by  the  officers  of 
the  corporation  or  member  of  the  firm  designated  for  this  purpose,  and  in 
this  particular  too  much  care  cannot  be  exercised. 

Sixth— It  must  accord  in  amount  with  the  invoice,  or  collection  of  in- 
voices, or  account,  which  it  represents,  or  if  used  for  purposes  of  wage  or 
salary,  with  the  items  thereon  stipulated. 

Being  thus  a  definite  and  absolute  receipt,  covering  a  definite  and  abso- 
lute account,  it  is  obvious  that  a  voucher  should  have  neither  interlineation 
or  erasures  and  either  of  these  would  invalidate  it.  If  a  mistake  is  made 
it  is  just  as  necessary  to  void  the  number  and  make  a  new  voucher  as  it  would 
be  to  void  a  bank  check  incorrectly  filled  out,  and  write  a  new  one.  No  busi- 
ness man  would  think  for  a  moment  of  making  erasures  or  interlineations 
upon  his  bank  check.     The  voided  vouchers  should  be  filed  numerically  with 

the  others. 

A  voucher  should  never  cover  a  greater  or  lesser  amount  than  the 
amount  paid,  and  should  not  be  used  for  payments  upon  account  except  as 
a  simple  receipt.  I  do  not  approve  of  the  use  of  vouchers  for  this  purpose  at 
all.  It  is  better  if  payments  upon  account  are  made  to  take  a  simple  receipt, 
and  finally,  when  the  last  payment  is  made  and  the  account  closed  to  make  a 
voucher  reciting  therein  the  component  parts  of  the  account  and  the  various 
credits  as  shown  from  time  to  time.  Thus  the  voucher  becomes  in  itself 
a  full  and  final  receipt  for  the  account. 

The  best  use  of  the  voucher  system  which  any  firm  can  make  is  to  use  it 
simply  to  cover  payment  for  accounts  due,  and  bills  discounted  for  cash, 
which  are  charged  direct  to  merchandise  or  accounts  payable. 

In  this  case  a  voucher  may  recite  the  various  invoices  represented  there- 
in, but  under  no  circumstances  do  we  consider  it  necessary  to  duplicate  upon 
the  voucher  the  various  items  of  the  original  bills.  This  seems  like  much 
useless  work,  carries  no  authenticity  with  it  and  affords  additional  oppor- 
tunity for  error.  Some  firms  check  up  their  monthly  accounts  payable  upon 
statements  sent  by  their  creditors,  and,  as  is  shown  in  Form  A,  to  follow, 
attach  the  statement  of  the  person  or  firm  in  whose  favor  the  voucher  is  made 
to  the  voucher.  Others  prefer  to  destroy  or  file  the  statement  and  to  write 
in  the  dates  and  amounts  of  the  various  invoices  covered  by  the  voucher. 
Either  method  is  equally  correct,  but  T  lean  toward  the  attaching  of  the 
checked  and  O.  KM  statement,  as  i1  carries  the  additional  evidence  of  correct- 

of  the  voucher  furnished  by  the  creditor,  and  does  not  require  the  re- 
checking  of  the  voucher  at  some  future  dale  to  establish  its  accuracy.  Some 
firms  destroy  the  creditor's  statement,  but  attach  a  statement  of  their  own, 


fully  and  carefully  filled  out.  But  the  good  effect  of  this  duplication  is  some- 
what problematical.  It  cannot  by  any  means  carry  in  itself  the  weight  or 
authenticity  which  the  original  statement  does.  Besides  this  it  may  require 
re-checking  by  the  receiving  firm. 

Nine  tenths  of  the  firms  or  corporations  using  the  voucher  system  at 
present  discount  their  bills,  but  there  is  no  good  reason  why  every  firm 
should  not  add  this  simple  and  effective  check,  guarding  payments,  assuring 
proper  receipt,  and  guiding  any  examination  of  the  books  which  may  become 
either  necessary  or  desirable. 

In  lines  of  business  of  considerable  magnitude,  such  as  railroad  com- 
panies, express  companies  and  great  corporations,  where  the  branches  are 
numerous,  and  radiate  to  all  points  of  the  compass ;  where  the  purchases  are 
made  at  many  different  points,  and  by  many  different  people,  while  the 
payments  are  made  from  one  central  point,  it  may  become  necessary  to  have 
vouchers  in  duplicate  or  triplicate,  but  in  any  ordinary  business  this  is 
entirely  unnecessary.  Whenever  a  duplicate  voucher  system  is  used  the 
original  invoices  may  be  attached  to  the  duplicate  voucher  and  if  so  done 
should,  at  all  times,  remain  a  part  thereof. 

The  main  abuse  of  the  voucher  system  of  the  present  day  is  the  large 
amount  of  useless  and  unnecessary  labor  employed,  corporations  in  many 
cases  requiring  that  every  item  from  the  original  invoice  be  entered  upon  the 
voucher,  deplicating  and  triplicating,  where  no  necessity  exists.  Some 
railroad  companies  go  to  the  extreme  of  requiring  a  separate  voucher  for 
each  separate  invoice,  hence  firms  from  whom  they  purchase  ioo  bills  per 
month  will  be  required  to  enter  ioo  payments  to  balance  them.  Such  a 
course  is  simply  idiotic. 

It  does  not  seem  to  me  either  justifiable  or  advantageous  to  make  the 
voucher  itself  do  service  as  a  check,  as  many  railroads  do.  There  can  be 
but  one  absolute  advantage  in  so  doing,  and  that  is  the  positive  certainty 
of  its  return  to  the  sender  for  filing,  but  as  the  public  is  becoming  better 
educated  from  day  to  day,  in  this  system,  there  is  hardly  less  surety  of  the 
return  of  the  voucher  which  is  sent  accompanied  by  a  check,  and  that  by 
return  mail,  than  of  the  one  which  does  check  service. 

Some  of  the  railroads  make  the  voucher  do  check  service  and  yet  avoid 
some  of  the  disadvantages  of  the  voucher-check,  by  using  a  rubber  stamp, 
which  makes  the  voucher  when  properly  signed  a  sight  draft  upon  the  maker. 
I  herewith  give  such  notice  which  is  used  by  the  Texas  and  Pacific  Railway 
Company.  In  the  body  of  the  voucher,  after  the  preliminary  description, 
the  reading  matter  is  as  follows : 

...  .in  full  from furnished  during  the  month  of , 

1900, as  per  bills  dated  as  follows 


attached  to  the  original  voucher. 
The  draft  notice  is  as  follows : 

This  voucher  when  properly  dated  and  receipted  becomes  a  sight  draft  on  L.  S. 
Smith,  Asst.  Treasurer  the  Texas  &  Pacific  Railway  Co.,  and  will  be  paid  on 
presentation  through  the  National  Bank  of  Commerce  in  St.  Louis,  Mo. 


The  advantage  of  making  the  voucher  a  draft  in  place  of  a  check  is,  that 
no  entry  need  be  made  in  the  cash  book,  until  such  draft  is  presented  and 
paid,  and  it  should  always  be  borne  in  mind  by  those  using  this  system  that 
the  date  of  payment  is  the  time  of  the  return  of  the  voucher  and  not  the  day 
upon  which  it  is  dated  and  forwarded. 

A  careful  comparison  of  the  various  systems  shows  that  most  of  them 
have  more  minutiae  than  is  necessary.  I  herewith  append  a  form  used  by 
the  Heusinger  Hardware  Co.,  of  San  Antonio,  Texas  (and  with  some  slight 


t~l£/VS/NGEO  HOW.  Co, 

3<z>n  Antonio.  ~7ex. 

-416.    5o.  Military    Plaz.a>.. 


-Do. 


5ar\  Antonio  "Te> 


I    ler>e.wi"ff\,  w<=  "SKe  plca&urae.  n  handing  you  oup  checf\    |Nlo or~v"tKe. 

r7r=.sf  Nlarffona!  £>.smft,  ^?<^r\  Antonio,  in.   -settlemenT  o^  below  c)es.<=nib<ed      <fcrn& 


■State- rne-.nf   .attacked 


CxairninccJ  and  approved 


T^t^l 


ReeciveJ    poyrr.erJT  in  f«jll   fop  above    i"le.rr?S 

5347 


.^fefej 


:hecK  \f  incoppcct 


VoucK&p  No . 

Dg.pa>ratfrve.ni" 


534  Z 


tlcn^>!noen>  /~7ar>c/yvdin>e     Co. 
y3dsn  Anfbn/o  ~7<~xc 


for»  Accoorvf  of 


variations  by  numerous  other  houses)  which  appears  to  me  to  be  the  sine  qua 
non  of  all  forms.  It  is  simple,  contains  absolutely  all  that  is  necessary  for  its 
full  purpose,  and  not  one  unnecessary  item.  This  voucher  does  away  with  a 
form  for  sending  checks.  If  this  feature  is  deemed  undesirable,  as  it  may  be 
by  some  firms,  the  first  part  of  the  voucher  could  be  easily  changed  to 
eliminate  that  feature. 

It  will  be  noticed  that  I  have  entered  in  the  form  "statement  attached," 
but  I  have  already  explained  how  this  may  be  changed  to  the  various  items 
paid  if  such  change  appears  desirable.  Form  A  is  the  face  of  the  voucher, 
and  form  B  shows  the  back  of  the  voucher  with  the  matter  necessary  for 
filing  purposes.  This  voucher  is  of  the  proper  size  to  be  folded  once,  to 
about  the  size  of  an  ordinary  check,  and  form  B  is  just  the  width  of  one  fold. 

It  is  entirely  necessary,  I  think,  to  state  the  necessity  for  method  and 
precision  in  any  kind  of  a  voucher  system  which  may  be  adopted.  At  the 
time  of  payment  the  number  of  the  voucher  should  precede  the  entry,  which 
is  carried  to  its  proper  column  in  the  cash  book,  or  separated  as  distributed 


s 


by  the  voucher;  although  it  is  unwise  to  separate  cash  credits  too  much  by 
columnar  work.  Some  book-keepers  go  to  extremes  in  this  direction. 
Every  voucher  should  be  checked  as  to  its  C.  B.  entry  wnen  returned  and 
numerically  filed.  Your  checkings  will  then  show  if  any  voucher  should 
be  delayed.  Many  corporations  also  have  printed  upon  their  vouchers  the 
following,  which  is  a  good  idea : 

Alterations  or  erasures  must  not  be  made  in  this  voucher.  If  not 
accepted  as  made,  it  must  be  returned  for  correction. 

Before  leaving  this  subject  I  wish  to  show  and  explain  what  appears  to 
me  the  simplest  and  yet  the  most  perfect  voucher  system  which  has  come  to 
my  notice.  I  am  enabled  to  reproduce  it  through  the  courtesy  of  the 
Hydraulic  Press  Brick  Company,  a  corporation  of  $3,000,000  capital,  with 
ramifications  in  almost  every  state  in  the  Union.  I  reproduce  it  herewith 
considerably  reduced  in  size. 


Q&3?  A.                              //*.                                        f->ft?  11W           '•     C?S^_  41432                                                                                       *m 

v^S^-l                          jt*9i~     :                   jutf. 

"-* — ■—-*-">-* 

Study  it.  Criticize  it.  Check  with  voucher  attached.  One  piece  of 
paper.  Both  bear  the  same  number.  Every  check  given  must  have  ts 
accompanying  voucher.  The  whole  idea  is  business-like,  simple,  compft  te 
and  illustrative  of  the  highest  order  of  accounting. 

In  adapting  the  voucher  system  to  your  business  study  closely  eve  ry 
element  therein.  Select  with  judgment  the  form  which  is  best  suited  to 
your  needs,  but  avoid  if  possible  (and  it  is  possible)  the  shoal  of  redundancy; 
remember  that  hours  of  work  saved  is  money  in  your  pocket — or  in  your 
employers,  and  that  the  best  book-keeping  is  that  which  tells  every  detail, 
with  the  least  minutiae.  Oft  times  the  very  simplicity  of  a  statement  makes 
it  easy  to  comprehend  and  difficult  to  subvert.  Thus  you  would  find  that 
the  voucher  system  entailing  the  most  labor  is  most  likely  to  carry  error  in- 
stead of  truth,  and  to  conceal  duplicity  instead  of  communicating  it. 

C.   A.    SWEETLAND. 


Voucher  System  in  a  Brick  Making  Business. 


IN  MY  previous  article  regarding  the  various  voucher  systems,  I  mentioned 
incidentally  a  system  now  in  use  by  the  Hydraulic  Press  Brick  Co., 
which  I  consider  simpler  and  better  than  any  other  I  had  yet  discovered. 
I  have  since  been  requested  to  give  a  fuller  exposition  of  this  system  so  that 
everyone  can  understand  its  complete  workings  and  be  prepared  to  utilize  it 
if  thought  proper.  To  this  end  I  have  interviewed  Mr.  Geo.  E.  Baker, 
treasurer  of  the  Hydraulic  Press  Brick  Co.,  of  this  city,  and  from  him  have 
received  the  information  here  set  forth. 

o 
9 


In  a  previous  letter  regarding  voucher  systems,  I  mentioned  the  un- 
vvieldiness  of  the  voucher  attached  to  a  check  as  being  against  its  usefulness, 
but  to  show  me  that  I  was  in  error  upon  this  point  Mr.  Baker  brought  forth 
his  check  book,  which  is  exactly  the  size  of  any  other  check  book,  running 
five  checks  to  the  page.  At  first  he  was  at  a  loss  to  overcome  this  difficulty, 
but  it  was  finally  done  by  folding  the  voucher  duplicate  over  and  padding  the 
check  book  a  little  to  make  up  for  the  thickness  of  the  extra  leaves.  When 
the  checks  are  written  these  extra  folded  leaves  are  laid  over  to  the  right  out 
of  the  way,  and  the  checks  are  written  before  the  voucher. 

I  will  give  the  modus  operandi  from  the  beginning. 

We  will  suppose  that  the  monthly  bills  are  to  be  checked  up  and  paid. 
After  being  properly  attested  "correct"  by  the  receiving  clerks,  they  pass 
into  the  book-keeper's  hands,  and  he  checks  them  against  the  itemized  state- 
ment and  attaches  them  to  the  statement  from  the  front.  Turning  the 
statement  over  he  stamps  it  with  a  rubber  stamp,  for  the  distribution  of  the 
charges,  thus: 


DISTRIBUTION. 

Mdse   

Factory 

Expense 

Total    


Of  course  this  distribution  may  be  divided  and  subdivided  to  suit  the 
business.  .  Below  this  is  stamped : 


This  account  paid  by 

Check   No 

mtp  ... 


If  there  should  be  only  one  bill  to  be  paid  by  check  the  matter  above 
goes  upon  the  back  of  that  bill. 

The  greatest  advantages  of  handling  invoices  in  this  manner  is  that  they 
at  no  time  leave  the  general  office  of  the  company.  In  many  cases,  especially 
where  the  departments  of  business  are  separated,  often  times  in  different 
cities,  the  attestation  of  an  invoice  is  of  relatively  as  much  importance  as  the 
invoice  itself.  The  proper  place,  there,  for  this  invoice  is  at  the  general 
office  where  there  is  no  opportunity  for  it  to  be  lost  or  destroyed. 

After  these  accounts  have  been  audited  correct  by  the  book-keeper 
they  go  to  the  cashier  for  payment,  and  taking  the  markings  upon  the  back 
of  each  invoice  or  statement  as  his  guide,  he  makes  checks  for  each  item. 


10 


The  checks  and  statements  audited  can  then  go  to  a  third  party  if  necessary, 
who  fills  in  the  vouchers  attached  to  the  checks,  from  the  statements  and  bills 
in  hand.  The  checks  may  then  be  verified  if  desired  by  the  signer  from  the 
papers  above  mentioned. 

Of  course,  it  is  obvious  that  all  of  the  above  may  be  done  by  one  per- 
son, but  we  are  assuming  now  the  u«se  of  this  system  in  a  business  of  some 
volume. 

After  the  checks  are  ready,  they  are  sent  to  the  creditor,  without  a  letter 
or  remittance  blank,  which  is  unnecessary,  thus  a  large  amount  of  work  is 
saved.  Upon  receipt  the  voucher  is  detached  by  the  recipient  and  returned 
in  an  envelope  sent  for  that  purpose  with  the  remittance.  The  check  itself 
goes  is  wandering  way,  many  times  going  through  a  number  of  banks  before 
it  is  returned  to  the  sender.  It  is,  however,  eventually  returned ;  then  as  the 
receipts  have  been  arranged  numerically,  and  as  they  still  form  a  part  of  the 
check  which  has  been  cashed,  they  are  united  back  to  back,  and  left  to  lie  in 
their  numerical  order  until  wanted. 

After  the  checks  have  been  made  out  for  the  bills  or  statements  the  lat- 
ter are  filed  away,  not  by  month  or  date,  but  by  the  name  of  the  creditor  by 
means  of  the  Shannon,  or  some  other  equally  convenient  file.  The  advan- 
tage of  this  is,  that  in  the  future,  if  any  account  or  invoice  should  be  called 
for,  even  if  it  was  several  years  old,  all  of  the  bills  would  be  found  in  the 
same  filing  section.  If  it  is  advisable  for  the  purchases  from  any  source  for 
any  year  to  be  figured,  all  of  the  bills  representing  those  purchases,  are  found 
together,  and  it  is  consequently  a  very  short  task  to  make  the  showing 
required. 

In  case  a  firm  makes  a  claim  that  a  certain  bill  or  account  is  unpaid,  it 
is  the  work  of  a  moment,  even  for  the  office  boy,  to  bring  from  the  file  in 
question  the  required  bill.  Upon  its  back  will  then  be  found  the  date  of 
payment  and  the  number  of  the  check  and  voucher. 

As  these  returned  checks  and  vouchers  are  filed  as  before  stated  in  jux- 
taposition, a  reference  to  the  check  in  question  brings  forth  with  it  a  receipt 
for  the  account  in  question,  and  it  is  forever  settled. 

The  advantage  of  this  simple  plan  for  auditing  work  will  be  seen  even 
without  the  necessity  of  any  explanation.  .  It  is  so  simple  that  none  of  its 
workings  can  be  hidden,  providing  all  ;;r.yments  be  made  by  check. 

You  may  say  that  all  payments  cannot  be  made  by  check  in  the  line  of 
a  general  business,  but  in  answer  I  will  show  you  that  they  can.  Wages 
may  vouched  for  by  the  person  who  pays  them.  Salaries  by  the  cashier. 
Petty  cash  may  be  easily  handled  in  this  manner.  A  stipulated  account 
may  be  checked  out,  vouchered  by  the  cashier,  and  charged  if  you  please  to 
petty  cash.  We  will  say  that  $200  is  thus  charged  to  start  this  ball.  Now 
during  the  month  the  cashier  pays  such  things  as  may  come  like  postage, 
express,  janitor  service  and  odds  and  ends  for  which  a  personal  receipt  of 
the  receiver  is  considered  unnecessary.  His  expenses  from  this  fund  may 
be  during  the  month,  $136.72.  He  makes  a  check  for  that  amount  and  signs 
the  accompanying  voucher ;  while  his  statement  of  the  items  of  account  after 
being  O.  K'd  by  his  superior  is  filed  like  any  other  invoice.  You  will  see 
that  the  drawing  of  this  check  restores  the  petty  cash  account  to  its  equilib- 
rium, leaving  both  voucher  and  receipt  where  they  properly  belong. 

11 


In  the  matter  of  the  return  of  the  receipt  accompanying  the  check  the 
Hydraulic  Press  Brick  Company  assure  me  that  in  the  last  five  years  that 
they  have  used  the  system,  there  have  been  few  occasions  to  ask  for  the  re- 
turn of  the  receipt  and  that  not  one  is  missing. 

In  order  to  handle  this  system  in  a  perfect  manner,  every  cent  that  is 
received  in  a  business  should  be  deposited  and  every  cent  that  is  used  in  the 
conduct  of  that  business  in  any  of  its  departments  should  be  checked  out. 
In  order  that  you  may  form  a  more  comprehensive  idea  of  this  system  than 
perhaps  this  explanation  may  give  you  we  will  herewith  reproduce  the  check,' 
with  accompanying  voucher,  used  by  the  company  above  mentioned. 


i  /&U 


•J."if&> 


« yu,  I 


.0X 


^wy^^X-,^^/^ 


a 


Cash  book  entries  should  be  made  from  these  checks  or  stubs,  and  be 
preceded  by  the  number  of  the  check.  If  columnar  cash  book  is  used  for 
distribution  no  further  posting  is  necessary  or  expedient  until  the  close  of 
the  month.  C.  A.  Sweetland. 


The  Voucher  System  in  a  Manufacturing  Business. 


I  HAVE  been  running  a  set  of  books  under  the  voucher  system  for  several 
years,  and  thought  possibly  an  outline  of  my  method  of  recording  might 

be  of  interest. 

As  Mr.  Sweetland  in  his  articles  does  not  touch  on  any  manner  of  re- 
cording, I  will,  as  well  as  I  can,  explain  our  method.  We  use  what  Mr. 
Sweetland  terms  the  third  class  voucher,  viz. :  that  of  attaching  the  invoice 
to  voucher  in  the  place  of  transcribing  the  items  of  invoice  to  voucher,  ex- 
cept in  cases  where  there  is  no  invoice,  in  which  case  record  of  items  is 
entered  on  voucher.  We  pay  all  vouchers  by  check,  although  the  cash  ac- 
count may  be  used  also  if  desired,  I  attach  a  copy  of  our  voucher,  also  a  leaf 
from  our  record  book  which  we  term  "Supply  Register,"  it  will  be  seen 
that  the  columns  of  the  supply  register  conform  to  the  distribution  of  the 
back  of  the  voucher.  The  voucher  and  leaf  of  the  supply  register  are  self- 
explanatory  when  compared  with  the  examples  below. 

The  voucher  is  always  recorded  before  mailing,  and  generally  before 
issuing  a  check  for  payment  of  same,  although  the  number  and  date  of  check 
should  be  entered  in  supply  register  before  mailing,  then  we  have  a  full  and 
complete  record  of  the  whole  transaction,  and  in  case  the  voucher  is  lost  we 
may  make  a  duplicate.     The  supply  register  has  a  grand  total  column  to 


12 


which  we  carry  the  total  amount  of  voucher,  each  department  having  a  total 
column,  the  footings  of  all  of  which  should  equal  the  grand  total  column ; 
each  department  may  have  as  many  item  columns  as  the  nature  of  the  busi- 
ness requires.  There  may  also  be  as  many  departments  as  desired.  At  the 
end  of  each  month  we  foot  up  the  columns  and  carry  the  amounts  of  the  total 
columns  of  each  department  to  Journal,  thus,  for  example : 
"March  31,  1900. 

Production   department    $426  52 

Maintenance  of  plant 134  63 

Real  estate  and  improvements 551  65 

To  accounts   payable $1,112  80" 

Supposing  all  of  the  above  were  paid  by  checks  on  Indiana  National 
Bank,  we  refer  to  stubs  of  check  book,  taking  all  checks  that  were  drawn  to 
pay  vouchers  during  the  month  of  March  (these  being  designated  by  mark- 
ing each  stub  of  check  that  was  drawn  to  pay  a  voucher  thus  "Voucher"), 
we  find  that  the  total  amounts  to  $1,112.80,  and  enter  in  Journal  thus,  ex- 
ample : 

"March  31,  1900. 

Accounts  payable $1,112  80 

To  Indiana  National  Bank $1,112  80" 

Vouchers  paid  in  March;  1900. 

This  balances  Accounts  Payable  and  gives  bank  proper  credit. 

If  desired,  the  footings  of  all  the  columns  may  be  carried  forward  from 
one  month  to  another,  and  at  the  end  of  the  year  we  have  totals  paid  for  all 
the  different  supplies  for  the  year.  Any  particular  transaction  may  be  re- 
ferred to  by  looking  it  up  in  the  supply  register  and  finding  the  number  of 
the  voucher,  the  vouchers  may  be  filed  in  cases  or  in  bundles,  one  month's 


ACCOUNTS^PAVABLE 

JOHN  JONES  &  CO. 
To  ..^rnU^mnll    4VOo D>R 


McK. 

A 

^X  0<£> 

.-s-p. 

1    A  ^L 

PS  .5% 

I  A 

J5.S     1 

es.**, 

1 

1     1    2. 

fto 

^_=======*=* 

^^^t^*""^ 

^_^^*****^ 

^^=^=:S*^~J^ 

Deceived  (place) Nt^.w  N^reK  (ckfc-)  McK   OA I90_Q_ 

of  JOHN   JONES&CO. 

ELIeyen n<-.^dF>g-.d    Tvv?-lvt-.     "y    &°/fino Do!  fan= 


beiPvc^  "fKc  on\qxjr\t  ir\  Voll   oV   above  account 
^  And  wiQ^TS.^/o/i/)  e/o/Tea    cvCc, 


13 


ACCOUNTS  PAYABLE 

•  John  Jones  e*  Co., 

DETTROITT  MICH. 

Vouckep    rsJo.  ..^52.. ...... 

Amouni-  .    $111^^. 

"The-  wiiKirv  <accou  r\T  coppcci 

~ 

'dcoistcred    in 

. .  Supply.  Rsz&isiGfa. 

THE    SECRETAOvS  ornce 

D/STPI3UTION  Or  SUPPLIED 

PRODUCTION    DE.PT. 
"TTrT^ti<r-.r=                                                               IOO 

3Q 

Oil 

4ft 

PO 

i=>4 

M 

1     Abn/                                    X 

\A/»sSte    Rrtc-kirvrt  «*>£-. 

7  1 

OQ 

lnc-iWc.ntal&.  /^ 

i  1  3 

5? 

44 

" 

maintenance:  or  plant 

•2  1 

,  - > 

14 

•     T><*A    ."ikni-mrt    Cffe.. 

5,5 

•   - 

/ 

£>£/4L  ESTATE  AND  IMDQOVEMENT5 

FS,  ,;Unrf* 

i  i  r> 

OO 

140 

oo 

O  1 

~o 

2IO 

6.-5 

OCNCO>ii_ 

work  in  a  bundle.  If  I  were  to  choose  from  the  three  classes  of  vouchers 
mentioned  by  Mr.  Sweetland  I  would  surely  choose  the  third  class  in  prefer- 
ence to  any  of  the  others  for  the  following  reasons,  viz. :  ist,  the  saving  of 
time  in  making  vouchers ;  2nd,  the  original  invoice  must  be  accepted  as  cor- 
rect, in  transcribing  we  are,  to  a  certain  extent,  liable  to  make  errors ;  3rd, 


<5UODLItI3 

rop> 

MONT/-7 

or 

Date- 

Isle. 

KlorrNO 

Totaj 

Arnourst* 

OroodooTiors  Oepfefotrne-rst" 

Tirnbc 

O.I  • 

l_abor- 

B* 

lr>c  "denial* 

Arrvourrt' 

«^»m!    .^mnlla-Co. 

, 

-■\--, 

f)4 

71 

■-. 

1  i  3 

nz 

42S 

as 

1 

us 

so 

\sa 

• 

Aii 

■•- 

L  ■   -'-•■  '* 

JO 

..•J 

aa 

— 

jj^l 

32 

«i£jB 

bsl 

MAD*  -r  ! 

/OOO 

Ma,riter\orice     of    Dlon,+- 

Rool    CilSte.  and    Impnovemerif . 

When  *nd  how   pa'd' 

LJop. 

.„* 

DcpoiNa 

Depo.oof 

lecd 

Ao»jr,+ 

Land 

e>'!d<p|MiKn~y 

Tcol* 

Amnt 

— 

I  34 

1.40 

-, 

•• 

,,. 

y  1 

,, 

1  '1 

•■  J 

.    _;. 

J^_ 

aa 

3£ 

■  '- 

^_ 

BS 

_&Jfi 

as 

14 


as  the  number  and  date  of  check  is  recorded  in  supply  register  as  well  as 
on  the  voucher,  the  check  forms  a  receipt  of  the  best  kind,  aside  from  the 
voucher  itself,  therefore  if  the  voucher  should  be  destroyed  the  check  and 
record  of  voucher  forms  a  very  good  receipt,  or  at  least  good  proof  that  the 
account  has  been  paid.  A.  F.  Johnson. 


The  Voucher  System  in  a  Hardware  Business. 


I  DO  not  know  that  the  following  procedure  is  not  the  usual  one  followed 
by  those  making  use  of  the  voucher  system,  but  submit  it  in  case  it  may 
be  found  useful  to  some    readers.     Invoices,  having    been    received, 
checked,  approved,  and  entered  in  an  abstract  journal  properly  ruled  for 
such  purpose,  and  the  journal  folio  note  dthereon,  are  filed  away  in  proper 
file  cases  in  order  of  date  of  payment. 

As  each  date  of  payment  arrives,  the  invoices  due  to  be  paid  on  that  date 
are  taken  from  the  file  case  and  vouchers  drawn. 


LL 


/<3&G> 


Dec 

P, 

G>v  rrvd.se      pep.  aTtt.    bifl 

20i 

oo 

~7 

do 

1  ^^ 

M 

do 

503 

4 

672 

fiO 

1 

1 

Received 
the  &t-irr\  of    -S>ix  hond^cd  and  »£>ey<r  nty*t> 
m  ^cjil    p. 


^pprooved  . 


Tn>eas 


■rnent    of  above    •&tarfe.>rv=.!~<t- 


IS99  of  C~  fM->t7n<°  rfc\  1     nr\P^w-^opfr-, 


(  t-^l^a-sxS   ei=fe...si©r>   <ar->d  ^etij 


VOiX/vfP 


COH-riNEN-TAL.    f-tAPDW/\f=> e   CO. 


No     Ift7ft 


ixi.amo  C">.h,'<^J^<~>  Wirac    Co. 
Address CKic-aqo  .     III. 


Dated  Q^<r-     -31 


iqqq 


ELnfer=>=cJ    r^c-.    ^i 


C^sK  Dooh  f&i.o -^e>T 


Z7/C5  7~£>/fi  dV  770  A/ 

Ck,rftco  W,ra<-  C^o     *  €5-72 

?o 

, 



15 


The  vouchers  are  numbered  consecutively,  which  numbers  are  entered 
in  the  cash  book  in  a  special  column  between  the  dates  and  the  ledger  folios. 

The  vouchers  when  returned,  signed  by  the  creditor,  are  filed  in  numer- 
ical order,  and  an  index  made  of  the  names  and  principal  items  of  purchase, 
thereby  enabling  one  to  immediately  refer  to  all  the  vouchers  issued  to  any 
one  person  or  firm,  and,  also,  to  ascertain  readily  the  cost  of  any  article  pur- 
chased at  any  particular  date,  or  the  name  of  the  firm  handling  such  an 
article. 

It  is  very  convenient  for  the  auditor,  in  this  system,  if  the  numbers  on 
the  checks  and  vouchers  correspond,  in  order  to  afford  a  ready  reference  be- 
tween check  and  voucher.  Where  business  is  done  with  but  one  bank,  this 
is  easily  done. 

I  attach  a  convenient  form  for  vouchers.  L.  S.  Duryea. 


The  Voucher  System  in  a  Wholesale  Business. 

I  wish  to  outline  the  system  I  have  in  use  and  which  I  believe  to  be  the 
bejt  system  in  existence.  The  accompanying  forms  show  both  sides  of  the 
voucher  (which  should  be  the  same  size  as  checks  used,  and  not  too  wide  to 
go  in  a  medium  size  envelope  without  folding)  properly  filled  out.. 


SIOtT     AITC    EETVK1 


.M9. 


^ec^J/rcm9).7l^/Jermem  W^/imSC. 


'//le.men/  o/ ascsxnU  ai  /iw  <i/fi/f>t>i<>n/  on  tMrr  }/</? 


^o/Zari, 


Nb 

IPAY    STATEMENT. 


sfra,9f6.. 


4. 


i  roitni  C   .  /en}     l  i'. 


•<&, 


16 


Invoices  are  first  entered  in  date  order  on  a  columnar  purchase  journal, 
then  the  amounts  are  transferred  to  the  pay  statement  or  voucher  in  the  same 
order  and  check  attached  for  total  amount  of  invoices,  less  cash  discount,  if 
any  of  the  invoices  are  subject  to  cash  discount.  These  checks  are  disbursed 
on  credit  side  of  cash  book  and  in  the  memorandum  column,  the  date  only 
of  the  invoices  paid  is  shown,  these  being  checked  against  purchase  journal 
an  dfolios  being  made  properly,  using  red  ink,  following  one  to  the  other. 
There  is  a  voucher  number  column  at  extreme  right  of  credit  side  of  cash 
book,  and  when  these  vouchers  are  signed  and  returned  they  should  be  given 
corresponding  number  with  the  disbursement  entry  and  filed  away  in  nu- 
merical order,  so  any  voucher  can  be  found  when  wanted.  It  sometimes 
happens  that  these  vouchers  are  not  signed  and  returned,  and,  in  this  case, 
the  canceled  checks  received  from  bank  would  take  the  voucher  number  and 
be  filed  away  in  order  with  vouchers.  The  voucher  shows  date,  amount, 
etc.,  of  each  invoice  paid,  which  is  all  that  is  necessary,  and  by  keeping  in- 
voices properly  filed  by  name,  in  cases,  they  can  easily  be  found  and  referred 
to  without  trouble.  N.  M.  Watkins. 


17 


The  Voucher  System  in  a  Fruit  Growing  Business. 


I  submit  herewith  a  form  for  a  check  voucher  that  embodies  many 
valuable  features,  the  result  of  several  years'  experience  as  Auditor  of  the 
Ozark  Orchard  Co.  It  has  been  prepared  in  a  manner  so  that  anyone  can 
obtain  from  the  face  of  the  voucher  all  information  concerning  the  transac- 
tions of  which  it  is  a  record,  and  this  is  a  matter  of  great  convenience  when 
examining  accounts  of  great  length.     By  using  this  form  of  voucher,  an 


Accounts  Payable 


Vouchen  Klo    3^ime  ascft  be/ow 


Ozark  Orchard  Co., 

KAN^A3    C/TY,    MO. 

D<=£te. 


"T^l 


Add. 


1  ssucd  oup  chec k  N o _       -     on  national  bank  of commzpce. 

Charged  "Jo"        1^,5= 

P^                           

' 

AmounT  of  checrV 

lb  M.  E".  Hanley  Tp>e<33*jreep>  -1  hereby  certify  "t^at-^  for>c^o\n^ 
Account  hw*s  been  <J<Jy  e>utboraized.  has  beer?  examined  by  rr\<z 
arjj  is  coppect".    Tbe^eforoe.  please  nn&Wt?   peiyrrie r-jt  of  S»ar7\e  by 

'   '                                frMt 

VPnrxt 

s\<$r!in&,  1H<S   ebecK    aHafc-bed     below 

*l£ 

Received  of  "the   OZADr\  OacnAPtoCO.  payment*  \rfiix\\  d 

C)<*q.  Man 

tbf=e<aoinc3  accourff,  fF)fs> A&y  o< 

r 

La-£> 

52.— _-  — 



To  Payee  ".  After*  sidr?'n^  1brae4o>n<*)  Voucher0 
detatcb  "tfys   obec.K 


3ame  oa 


office  boy  can  take  the  Ledger,  and,  without  asking  questions,  get  all  vouch- 
ers, and,  at  the  same  time,  all  checks  used  in  making  payments,  thus  pre- 
senting in  perfect  form,  all  the  facts  so  useful  in  adjusting  disputed  accounts. 
Should  you  desire  it.  I  will  submit  another  form  that  I  have  prepared. 
I  hope  that  the  form  enclosed  herein  may  be  interesting  to  members  of  my 
profession.  E.  M.  Smith. 


IS 


An  Accountants'  Voucher  Record- 


■m-THEN  the  voucher  system  first  came  into  use,  the  voucher  record  was 
\X/  a  book  of  reasonable  size  and  with  a  comparatively  small  number 
of  columns.  As  the  advantages  of  the  system  came  to  be  more 
generally  understood  and  appreciated,  the  record  gradually  expanded,  until 
now  it  has,  in  some  instance,  grown  beyond  manageable  proportions.  Ad- 
vantageous divisions  and  subdivisions  of  an  account  are  sometimes  omitted 
in  order  to  prevent  the  record  from  becoming  unwieldy.  The  short  form 
of  voucher  record  here  shown  is  intended  to  be  used  in  connection  either 
with  a  voucher  ledger  or  with  voucher  accounts  opened  in  the  regular 
ledger. 

A'SnORT  1/OUCtiEP  &ECOQD 


3 

e. 
HZ 

£  1 

r  f.-s 

62  f  % 

•^  4- 

P 

<r5  < 

bo 
■&- 

m 

a      > 

e 

-      J! 

Si 

X'fl 

0  fl 
E  a 

a 

24 
26 

123 
124 

125 

126 
12.7 

X.LumbfpCo. 

Cashier 

V.  PT3,  Co.; 

Cashier5 
~Z.AS.sy     Co. 

Total 

Lumber3 

Pr^rftrnrf 

P.RTcKt. 
Advfe. 

Off.ce 
Office 
Off.cc 

Selling 
5ellir79 
S>elli'n<rf 

Materials 

Laboro 

ClepKs. 

Cxsct: 

Supplies. 

Trav.  Ex. 

Advent. 

673 

432 

ZOO 
324 

435 
456 
555 

1,745.16 

5A3.SG 

35£>7S 

206.25 

ZS.OO 

123,73 

20«" 

345  78 

3.37231 

1743.16 

1  (I09.59 

15178 

20, 

34576 

3.37231 

Mav23 

danTS 

23 
24 
26 

ch.45 

*  12 

'      17 

•  IS 
•     19 

In  a  certain  business,  for  example,  the  accounts  are  classified  under 
three  general  heads,  office,  manufacturing  and  selling.  These  principal  ac- 
counts are  subdivided  into  materials,  labor,  supplies,  and  so  on.  The  ledger 
headings  follow  the  sub-divisions.  Thus  the  ledger  will  be  headed,  "manu- 
facturing account,  materials,"  "manufacturing  account,  labor,"  "office  ac- 
count, supplies,"  and  so  on.  The  column  in  the  short  voucher  form  headed 
"distribution  of  voucher"  shows  the  amount  to  be  posted,  and  the  column 
headed  "subordinate  account"  shows  the  ledger  account  to  which  the  post- 
ing is  to  be  made.  This  short  form  of  voucher  record  admits  of  an  indefi- 
nite division  and  subdivision  of  the  accounts  without  enlarging  the  size  of 
the  record.  The  disadvantage  attending  its  use  lies  in  the  fact  that  the  sev- 
eral amounts  have  to  be  posted  separately  instead  of  in  totals.  On  the  other 
hand,  the  ledger  accounts  will  show  the  way  each  item  is  running  and  will 
also  admit  of  explanatory  notes  being  made  in  the  remark  column  of  the 
ledger.  John  H.  Bi<acku)Ck. 


A  General  Voucher  Form. 


The  following  will  describe  the  voucher  used  in  our  business.  The  face 
of  same  is  ruled  off  for  Date,  Amount,  Discount,  Deductions  or  Rebates,  and 
Total  Column.  There  is  also  room  for  other  columns  should  same  be  neces- 
sary. This  form,  of  course,  involves  only  the  writing  of  gross  amounts  of 
each  bill.     The  Deduction  column  can  be  used  for  whatever  deductions 


19 


have  been  made  on  original  invoice  for  mistakes,  overcharges  short  on  order, 
etc.,  the  same  in  detail  being  written  on  the  invoice  and  not  in  voucher.  On 
the  reverse  side  the  voucher  has  the  headings  for  the  accounts  as  there  are 
in  the  Ledger.  This  form  can  be  made  to  fit  any  business,  as  they  can  be 
as  many  subdivisions  made  as  deemed  necessary.  The  voucher  number  can 
be  taken  from  the  check  number,  so  that  in  case  of  its  non-return  the  check 
can  be  filed  in  its  stead.  Where  a  cash  book  is  used  with  special  columns 
for  accounts  payable  and  expense,  then  this  voucher  is  really  a  transcript  of 
same,  and  can  be  easily  checked  off  in  case  of  error,  and  where  an  account 
is  to  be  looked  up,  for  payments  made.  The  voucher  is  made  to  fold  over 
the  invoices  and  is  easily  filed  with  them.  In  case  there  should  be  a  num- 
ber of  single  bills  paid,  each  with  its  own  voucher,  and  these  bills  are  all  for 
machinery  account  for  instance,  then  the  separate  vouchers  can  in  their  turn 
be  placed  in  one  voucher  and  filed  away  as  one,  as  for  example : 

Voucher  No.    10875.  J.  Smith  &  Co.,  Machinery  acct. .  .$432.54 

"     10897.  S.    Brown....  "  "  332.45 

"     1 1000.  J.   White "  "  223.67 

"     11001.  B.  Black  &  Co.  "  "  554.89 

And  the  single  voucher  to  cover  these  four  would  read : 

Vouchers  Nos.   10875.     Paid   (date  on  seperate  vouchers    need 
97.         not  be  repeated.) 
1 1000. 
1. 

Paid  to Names  on  separate  vouchers  need  not  be  re-* 

peated. 
Machinery  acct $1,543.55 

Leon  Joseph. 


20 


illustration  of  Combined  Voucher  and  Check. 


JUfiS. 


Audit  No  _.I3&9__._ 


NATIONAL    STEEL  and  WIRE   COMPANY 

To The_  Qcor^.c_JN-  PjieEce...QQ. 


MorStts 

of cisin>sjapx 1S9-2 Adcioj>_  _MicJ-w  _ 

Nov. 

2d 

(on  "ttVe  follower^  duly  authorized   oooouiNf;  whyoN  '••  henefav    opproved 
per».     delScled     bills  or\    file. 

i7e 

po 

DISTRIBUTION 


ACCOUNT     AMOUNT 


J.Srrjtt^. 


Received.. ^wftrx.  L3_1890_fro-TN  NATIONAL   STEEL  and  WIRE  COMPANY. 

tf\e   sunr\  of,  _Qno  -KondrvesL  .and.  eeyecvtj'-aii  — — — 7  -5r-> 

ir\    full  •  payrr\ervl"  of    tt^e.    o.bove    accour\h 

-Tbff-Qsor^JN^Pfe^c,  Sp.^  .. 


NOTE.,  if  arr\our\T  i»  r\ot"  acrtldfoctopy,  petCrr\  voucJ\cj» 


n1t\out~  6tteryiTior\    fore  oorroLJiorv. 


No.li££_ 


"The  Clcorftf,  N  Pif.pc.r.   C' 


Ledcjcp;_Q_ 


ArfpUry     M.c.k^ 


Anxourf  I7ft^ 


TKis  VoucKoio  wKsr\  properly  n>e- 
ceip'ted  will  be.  aecepled  &&  a  dr^ft" 
or\  tKo  NATIONAL  STEEL  and  WIDE 
COMPANY,  -tK^ou^K  1Ke,  HOST  NA- 
TIONAL   BANK   of  Clevalarxd    O. 


NXtT?>rNAl    ^fe^.l  cS'W.pe,  Co... 


Voucher  Record  for  Publishing  Business. 


TT-ic  EiooH-ftce p*tr*  Publi\3hina> 

Co 

.CIS) 

V£>l/CA7^Q 

CiECOC- 

r 

OA 

Horn,-, 

QHfo^x» 

r.-.. 

TsttU. 

i.,r. 

r"'X' 

'.  "T " 

UVv,^  _ 

'.  V.'.'.T 

"r^ 

Bool\» 

DW 

.  1 

C£S* 

l^^-v. 

i 

! 

21 


Principles  of  Distribution  in  the  Voucher  System 
of  Accounts. 


THERE  is  scarcely  any  line  of  book-keeping  in  which  one  does  not  at 
all  times  run  across  the  very  interesting  question  as  to  what  account 
this  or  that  item  shall  be  made  a  charge,  and  the  answer  to  the  ques- 
tion, taken  through  a  series  of  fiscal  periods,  as  shown  by  the  entries  them- 
selves, is  quite  a  clear  exposition  of  the  principles  upon  which  the  company 
accounting  is  carried  on. 

In  some  respects  it  is  unfortunate  that  such  a  marked  variation  of  cir- 
cumstances, etc.,  prevails  in  even  the  accounts  of  companies  of  the  same 
class ;  and  so  it  is  almost  impossible  to  prescribe  any  precise  methods  of 
ruling,  any  accounting  formula  by  which  the  items  of  an  extensive  bill  with 
many  charges  shall  be  assigned  to  debits  which  will  prove  at  all  uniform  in 
subsequent  periods ;  debits  of  such  a  nature,  that  is  to  say,  that  any  subse- 
quent items  in  various  classes  of  bills,  can  be  reasonably  inferred,  even  in 
the  majority  of  cases,  to  be  a  charge  against  the  same  account  as  those  at 
first  occurring.  It  is  in  fact  this  very  circumstance  which  makes  the  em- 
ployment of  a  carefully  prepared,  well  itemized  voucher  folder  of  so  much 
value,  both  to  those  interested  in  the  business  and  to  the  auditor  as  well,  giv- 
ing, as  it  will,  if  properly  used,  a  clear  and  explicit  statement  of  the  special 
distribution  of  the  enclosed  bill  or  aggregate  of  bills ;  and  if  a  folder  is  pre- 
pared in  such  a  manner  that  there  will  be  nearly  half  an  inch  between  the 
lines  of  the  folder,  space  will  thus  be  left  for  the  auditor  to  note  in  red  ink, 
perhaps,  his  own  method  of  distribution  of  the  different  disbursements 
which,  to  his  practiced  eye,  seem  to  have  been  originally  incorrectly  awarded 
to  this,  that,  or  the  other  account  on  the  books  passing  in  review. 

In  few  companies,  unless  we  include  building  and  loan  associations,  is 
there  the  slightest  attempt  to  regulate  the  methods  of  distributing  the  ex- 
pense accounts,  by  charter  or  by-laws ;  although  in  municipal  accounts  we 
come  very  close  to  the  by-law  regulations  as  to  the  distributive  principles  to 
be  employed  through  the  ordinance  book,  which  is  strictly  an  exemplification 
of  continually  changing  and  enlarging  corporation  by-laws ;  and  prescribing 
as  it  does,  the  uses  to  which  the  allotments  of  the  general  fund  shall  be  out, 
it  distributes,  many  times  in  advance  of  the  receipts,  the  revenue  of  the  cor- 
pc  ration  along  the  line  of  accounting  principles  which  are  governed  by  the 
exigencies  of  the  cases  brought  before  the  councils,  and  the  face  of  the  youch- 
ers^themselves  will  have  to  corroborate  in  each  case,  the  special  distribution 
of  the  funds  which  is  illustrated  in  the  payments  for  sewer,  paving,  lighting 
and  other  purposes. 

But  in  ordinary  undertakings  there  cannot  possibly  be  any  regulation 
of  the  disbursements  of  the  income  either  in  advance  or  at  other  times,  owing 
to  the  unforeseen  character  of  the  company  disbursements  connected  with  the 
operating  expense  account,  and  which  in  the  case  of  the  municipality  is 
usually  quite  closely  approximated  in  advance  through  the  comptroller's 
estimates  at  the  beginning  of  the  fiscal  period.  Perhaps  the  most  valuable 
difference  between  these  two  lines  of  companies,  the  factory  and  the  city 

22 


accounts,  lies  in  the  simple  statement  that  the  latter  is  not  in  any  real  sense 
a  corporation  "for  profit"  while  the  other  is  such  in  every  sense  of  the  term. 

It  is  a  well  known  fact  that  labor  charges,  for  example,  incurred  in  the 
building  account,  do  not  always  render  it  more  valuable  as  a  company  asset, 
and  for  that  reason  should  be  excluded  from  an  appearance  thereunder. 
Whenever  lumber  is  purchased  and  men  are  set  to  work  to  adapt  it  to  its 
place  in  the  factory  structures,  for  some  new  purpose,  then  we  have  what 
constitutes  a  charge  against  the  building  account;  but  when  the  labor  is 
employed  without  the  auxiliary  of  new  building  material,  then  it  forms 
a  charge,  not  against  one  of  the  visible  assets  of  the  company,  but  against 
a  lepair  and  renewal  account,  which  is  not  of  the  nature  of  an  addition  or 
improvement  to  the  structure,  but  only  a  maintenance  thereof. 

Manufacturing  companies  usually  make  a  marked  difference  between 
the  building  and  improvement  accounts,  relegating  to  the  latter  heading  such 
items  as  the  construction  of  new  walks,  fences,  partitions,  railings  for  offices, 
etc.,  stairways,  removal  of  some  old  construction  and  substituting  new  there- 
for. 

And  they  proceed  upon  the  principle  that  whatever  representative  ac- 
count the  varied  items  may  appear  under  at  first,  a  sharp  distinction  must 
be  maintained  up  to  the  close  of  the  fiscal  year ;  and  then,  when  the  different 
classes  of  maintenance,  improvement  and  renewal  costs  have  been  properly 
distributed,  their  relative  place  in  the  entire  system  of  accounts,  and  their 
relation  to  the  main,  the  building  account,  can  be  very  readily  ascertained, 
and  amalgamated  with  it,  closing  into  it  one  by  one,  the  various  sectional 
departments,  with  their  footings,  subject  to  such  changes  as  the  manage- 
ment may  wish,  and  thus  preserving  distinct,  not  only  through  one  fiscal 
year,  but  up  to  close  of  the  undertaking,  the  history  of  the  sectional  ized 
charges  in  a  clear  and  comprehensive  manner. 

In  the  correlative  ledger  heading  in  railway  accounts  (the  construction 
account)  we  find  even  interest  and  discount  items  made  a  charge  against  it; 
where  they  are  paid  out  on  loans  negotiated  for  that  special  purpose;  and 
homeiimes  even  certain  portions  of  the  law  charges  are  placed  against  ir  also. 

In  the  factory  accounts,  it  is  necessary  to  keep  very  carefully  in  rrind 
the  difference  between  footings  of  any  representative  account  like  the  build- 
ing account,  which  is  the  substitute  for  the  railway  term  "construction," 
and  footings  of  accounts  which  stand  for  added  cost  merely  and  not  for 
added  value;  for  cost  does  not  always  mean  value  as  has  been  shown  fre- 
quently in  recent  years,  when  sudden  insolvency  assailed  an  undertaking. 

In  oil  accounts,  the  sum  of  the  charges  against  any  particular  well  or 
group  of  wells  is  very  rarely  indeed  made  the  basis  of  a  sale.  It  is  the  pro- 
duction alone  which  is  the  governing  factor ;  and  the  sum  of  the  amounts 
standing  against  the  lease  construction,  against  the  undertaking  as  a  whole, 
is  conveniently  placed  in  the  background,  its  results  reserved  only  for  the 
interested  consideration  of  the  retiring  partners. 

Now  the  arrangement  of  the  voucher  system  and  record  in  oil  accounts 
has  two  distinct  aims ;  first,  to  obtain  therefrom  the  exact  cost  of  any  one 
well  at  any  time,  and  second,  the  varied  classes  of  costs  common  to  all  the 
wells,  but  so  arranged  that  the  cost  for  the  original  purchase  of  the  property, 
drilling,  tanks,  labor,  law,  traveling,  etc.,  can  be  also  ascertained  by  them- 
selves separately. 

23 


This  distinctive  result  can  be  reached  easily  enough  by  one  method, 
keeping  a  separate  sheet  for  each  well  of  a  lease,  whatever  their  number  may 
be,  and  then  in  order  to  reach  the  total  cost  for  a  given  lease,  or  group  of 
leases,  simply  carry  forward  the  footing  of  each  distributive  column  on  the 
various  pages,  into  an  aggregation  sheet  to  represent  the  cost  (not  value)  of 
the  total  undertaking.  When  we  come,  however,  to  apply  this  idea  to  fac- 
tory accounts,  it  will  be  needful  to  bear  in  mind  the  fact  that  there  is  a  great 
difference  between  the  current  operating  expenses  and  the  cost  or  expense  of 
any  single  machine,  or  adventure  which  may  form  a  part  of  the  entire  factory 
system  of  accounts. 

There  are  in  factory  accounts  two  distinct  methods  of  charging  labor ; 
one  to  the  job  account,  and  one  to  the  current  operation  account,  so  far  as 
its  items  fall  outside  of  the  charges  which  can  be  shown  to  be  debits  against 
any  particular  jobs  on  hand.  Any  attempts  to  reach  the  cost  of  a  single 
machine  or  of  a  group  of  articles  made,  must  be  carried  out  through  the  aux- 
iliary of  special  statistical  sheets  as  a  rule  in  which  can  be  incorporated  from 
the  ordinary  record  books  of  the  company,  the  isolated  charges  taken  seratim, 
which  will  give  the  desired  information. 

It  is  only  where  the  number  of  machines  is  limited  that  their  cost  up  to 
date  can  be  shown  and  carried  into  the  regular  factory  accounts  from  day 
to  day,  as  for  instance,  where  the  equipment  consisted  of  six  machines  of  a 
certain  kind,  of  different  sizes  for  turning  out  different  sizes  of  the  same 
class  of  products,  and  the  rest  of  the  equipment  consisted  of  the  ordinary 
belting,  shafting,  pulleys,  engines,  boilers,  etc. — the  distribution  of  costs 
was  made  through  a  specially  prepared  voucher,  dividing  the  charges  into 
two  distinct  classes — one  of  the  six  machines,  the  other  for  the  rest  of  the 
equipment  in  a  single  lump;  that  is,  the  printing  form  on  the  folder  ran  as 
follows  :  Voucher  number,  amount,  net  (third  line  being  reserved  for  indi- 
cating the  net  amount  paid  in  distinction  from  the  gross  amount  entered  upon 
the  line  above,  since  there  were  always  several  deductions  from  the  face  of 
the  original  bill  on  account  of  freights,  two  per  cent  off,  rebates,  breakages, 
claims  of  various  kinds,  etc.),  paid  (this  line  giving  the  date  of  payment), 
by  (this  line  giving  check  number,  or  the  word  "note"  if  paid  by  that  means, 
or  else  the  name  of  one  of  the  firm  who  might  have  settled  the  bill  himself), 
charge  (following  this  word  came  the  distribution  of  six  lines  for  the 
machines,  and  eight  lines  for  the  items  belonging  to  current  operation  costs, 
such  as  labor  and  wages,  freights,  interest  and  discount,  rebates,  oil,  fuel, 
wire  and  nails,  etc.).  And  finally  ent.  (that  is  entered),  meaning  the  folio 
of  cash  book,  journal,  etc.,  on  which  the  figures  were  found  which  were 
placed  on  the  folder. 

In  all  cases  where  the  carriage  costs  and  the  supply  bills  are  so  numer- 
ous as  they  are  likely  to  be  in  factory  accounts,  oil  accounts,  etc.,  the  use  of 
an  itemizing  slip  ruled  up  by  the  printer  for  the  purpose,  is  advisable,  and 
on  which  can  be  placed  the  items  picked  out  from  the  great  array  of  figures 
on  the  consecutive  pages  of  the  periodical  bills,  freight  and  supply,  the  items 
one  by  one  being  marked  in  red  ink  or  pencil  with  the  initial  of  the  account  to 
which  they  should  be  charged,  first ;  and  then  the  items  taken  one  by  one  and 
recopied  on  distribution  slip  pasted  to  the  original  bills  as  a  proof  sheet  or 
slip. 

The  divison  of  the  costs  and  its  skillful  distribution  is  carried  out  in 

24 


the  most  remarkable  manner  in  railway  accounting,  where  the  cost  of  a  single 
car,  or  engine,  or  other  item  of  equipment  is  carefully  preserved,  in  connec- 
tion with  the  operating  expenses,  through  the  aid  of  the  loose  leaf  system 
of  accounting,  as  shown  by  the  use  of  train  sheets,  cost  sheets,  freight  income 
sheets,  and  so  on,  the  tissue  and  other  forms  of  record  sheets  being  so 
numbered,  dated  and  filed,  in  different  colors  and  sizes  that  the  well  nigh 
countless  items  of  expense  can  be  easily  aggregated  into  comprehensive 
summaries,  balance  sheets  and  statistical  tables  at  short  notice.  The  chief 
clerk  of  a  large  railway  company  will  readily  appreciate  the  wonderful  skill 
with  which  the  footings  of  any  and  all  of  these  apparently  isolated,  but  really 
closely  connected  accounting  departments  of  the  road,  can  be  quickly  carried 
down  and  forward  into  summary  sheets,  and  the  totals  prepared,  simply 
from  the  proper  sectionalizing  of  the  enormous  number  of  items  representing 
the  operation  expense  as  a  whole. 

A  question  came  up  not  long  since  in  a  Pennsylvania  factory  as  to  the 
representation  of  the  insurance  account  which  well  illustrates  the  advantages 
of  distributing  expenses  carefully.  A  certain  class  of  machines  maintained 
as  a  new  venture,  was  charged  with  labor,  material  costs,  repairs,  a  pro  rata 
of  all  taxes,  insurance  carriage,  salary  and  similar  costs,  and  the  insurance 
as  fast  as  it  ran  out,  was  not  closed  into  profit  and  loss  but  retained  in  the 
venture  account,  as  a  part  of  the  actual  maintenance  costs,  while  the  general 
insurance  account  was  carried  on  the  general  ledger.  But  since  part  of  the 
charges  against  this  account  were  kept  under  the  new  venture  account,  they 
could  not  be  written  off  in  the  general  books  on  the  cancellation  or  expiration 
of  the  policies  without  creating  confusion  in  the  accounts ;  so  that  the  attempt 
to  represent  the  running  out  of  the  insurance  premiums  was  actually  aban- 
doned, and  at  the  end  of  each  three  months  a  new  insurance  inventory  taken, 
and  if  it  was  large  enouge  to  equal  the  amount  of  the  items  charged  in  the 
general  ledger,  that  amount  was  retained;  if  too  large,  enough  was  written 
off  to  profit  and  loss  on  the  general  account  to  make  up  the  difference  and 
reduce  the  general  insurance  account  to  its  proper  standing.  This  method 
is  simply  given  as  it  was  found  to  exist  without  comment. 

In  auditing,  one  of  the  first  tasks  is  to  ascertain,  as  well  as  possible,  the 
general  principles  on  which  the  distributive  processes  have  been  carried  out, 
and  if  any  apparent  discrepancies  occur,  to  see  on  what  principles  the  discrep- 
ancies themselves  arose ;  if  any  sudden  changes  are  found  in  the  distribution 
scheme,  to  see  if  there  is  any  cause  for  the  same,  made  necessary  either  by  the 
previous  inaccuracy  of  the  accounting  system,  or  some  marked  change  in  the 
management  of  the  business  itself,  for  both  of  these  features  are  possible 
factors  for  such  changes. 

And  the  great  underlying  principle  of  all  distribution  schemes  is  that 
not  only  the  constitutent  items  of  cost  can  be  easily  reached  through  an 
inspection  of  the  columnar  divisions  of  the  record  books,  but  also  thnt  their 
columnar  division  itself  shall  be  such  as  to  enable  comprehensive  results  to 
be  quickly  and  intelligently  obtained  within  a  reasonable  time.  Upon  these 
two  principles  hang  all  the  law  and  the  prophets  of  any  system  of  distribu- 
tion. P.  h.  Grover. 


25 


Advantages  and  Disadvantages  of  the  Voucher  System. 


THE  voucher  system  can  be  divided  into  three  classes,  each  of  which  has 
its  adherents.  First,  I  will  consider  the  system  embodying  the 
voucher  and  check  in  the  same  document,  which  is  used  by  many  of 
the  larger  corporations,  especially  the  railroad  companies.  The  principal 
advantage  of  this  system  is  the  fact  that  upon  the  return  of  the  voucher  check 
the  sender  has  in  one  document  a  record  of  the  goods  purchased,  the  time 
of  purchase,  the  time  of  payment,  and  a  receipt  for  the  same.  The  uniform- 
ity of  size  renders  filing  easy,  and  the  consecutive  numbering  (copies  of 
which  appear  at  the  proper  entry  in  the  cash  book)  facilitates  the  checking 
by  auditors. 

The  disadvantages  of  this  system  to  the  sender  are :  First,  the  addi- 
tional labor  required  to  transcribe  the  bills  upon  the  voucher,  the  additional 
opportunity  for  error  from  this  work;  and  if  the  bills  are  not  thus  tran- 
scribed, the  voucher  itself  is  of  no  more  benefit  than  an  ordinary  check. 
This  item  of  labor  must  amount  to  a  considerable  sum,  where  the  transactions 
are  many. 

Second,  there  is  no  ready  record  as  is  the  case  with  check  stubs,  and  the 
record  of  the  account  with  the  bank  must  be  also  separately  kept.  In  some 
large  offices  where  the  cash  book  is  in  constant  demand  the  posting  of  cash 
debits,  paid  by  check,  are  made  direct  from  the  stubs  themselves. 

Third,  where  there  is  a  mistake  made  in  the  voucher,  it  causes,  fre- 
quently much  confusion,  as  the  cash  entry  has  already  been  made,  and  while 
the  voucher  must  of  necessity  be  returned,  being  incorrect,  and  being  itself 
a  receipt  in  full  for  the  account,  the  issuance  of  a  new  voucher  for  the 
proper  amount  would  vitiate  the  cash  entry,  and  also  the  credit  to  the  bank ; 
and  the  return  of  this  one,  with  the  issuing  of  an  additional  voucher,  should 
this  one  be  short  in  payment  for  the  difference,  carries  with  it  no  evidence  of 
authenticity;  as  it  must  be  issued  to  correct  an  error.  The  main  disad- 
vantage to  the  recipient  of  such  a  voucher  check  is  that  it  is  usually  sent 
without  an  inclosure  slip,  and  no  corroborative  record  of  its  receipt  can  be 
kept,  a  very  desirable  thing  in  all  records  of  cash  receipts.  Second,  where 
the  cashier' and  treasurer  (receiving)  are  separated,  the  original  document 
must  remain  in  the  cashier's  hands  until  it  is  checked  correct,  and  entered. 
If  this  was  the  only  check  received  it  would  not  take  long,  but  it  is  frequently 
only  one  of  hundreds.  Of  course,  this  disadvantage  could  be  easily  obviated 
by  the  sender  using  a  simple  remittance  slip,  merely  stating  the  name  of  the 
sender  and  the  amount  of  the  voucher.  Some  of  the  larger  corporations  arc 
now  doing  this. 

The  second  class  of  vouchers  used  are  similar  to  the  voucher-check  in 
all  particulars,  except  that  they  are  accompanied  by  a  check,  for  the  amount 
and  arc  not  considered  a  check  or  draft  in  themselves. 

The  principal  disadvantage  of  this  system  to  the  sender  is  the  large 
amount  of  time  required  to  transcribe  entire  the  item  of  bills  purchased  upon 
the  voucher.  This  in  large  linns  or  corporations  requires  the  services  of 
many  extra  clerks,  and  is  never  placed  upon  the  book-keeper.     It  is  really 

26 


unnecessary  labor,  as  the  items  with  the  proper  checking  of  receipt,  correct- 
ness as  to  practice  and  quality,  as  well  as  extensions  and  footings,  should  all 
be  found  upon  the  original  invoice,  and  wherever  this  voucher  system  is  used ; 
the  entire  labor  of  the  different  creditors'  bill  clerks,  must  be  duplicated  upon 
the  vouchers.  Then  these  vouchers  must  be  carefully  compared  with  the 
originals,  to  avoid  error. 

The  objections  mentioned  in  third  paragraph  of  the  voucher-check  sys- 
tem are  also  applicable  to  this  system.  Of  course  not  to  the  extent  of  dis- 
turbing the  equilibrium  of  the  bank  account,  but  as  far  as  its  other  effects 
reach. 

There  is  no  question  of  the  advantage  of  having  all  receipts  of  a  similar 
size  and  appearance,  and  consecutively  numbered ;  as  by  this  means  the  labor 
of  tabulating  or  checking  is  reduced  to  a  minimum ;  but  still,  wherever  there 
exists  a  necessity  for  additional  entries,  either  upon  vouchers  or  in  records, 
there  also  exists  additional  opportunities  for  error. 

The  third  class  of  vouchers  I  will  mention  is  that  where  the  voucher 
itself  does  not  itemize  the  account,  but  is  issued  for  a  stipulated  amount  to 
pay  for  bills  thereunto  attached.  The  various  bills  for  which  the  voucher 
vouches  are  attached  to  it,  and  thereafter  form  a  part  of  it.  _ 

This  system  minimizes  the  labor,  and  brings  an  additional  feature  of 
accuracy  to  bear  upon  it,  viz.,  the  actual  invoices  of  the  creditor  which  com- 
mends it  above  either  of  the  others,  where  it  becomes  necessary  to  use  this 
system  to  facilitate  checking,  and  to  avoid  payments  of  monies  for  which 
there  has  been  no  value  received.  Both  of  the  other  classes  of  vouchers 
may  be  juggled,  and  it  would  require  the  corroborative  evidence  of  the 
original  bills,  to  be  absolutely  certain  of  their  exactitude  and  accuracy. 

Even  this  system  has  been  beaten.  One  case  to  my  knowledge  involv- 
ing several  thousand  dollars,  was  discovered  by  an  expert,  by  close  investi- 
gation. Everything  seemed  perfectly  regular,  but  after  much  investigation, 
it  was  found  that  the  cashier  had  used  invoices  several  years  old,  erasing 
and  bringing  the  dates  up  to  the  present.  The  voucher  was  then  made 
with  bill  attached,  in  due  form,  charged  out  and  the  cash  pocketed  by  the 
dishonest  employe.  Of  course,  had  all  payments  been  made  by  check  this 
method  could  not  have  been  so  successfully  used.  Even  in  this  case  it  was 
finally  discovered. 

The  great  disadvantage  of  this  system  is  that  it  becomes  cumbersome 
to  file  voucher  and  bills  together,  especially  whenever  there  is  a  great  number 
of  bills  paid  in  one  voucher.  It  also  costs  additional  postage  to  the  sender 
and  the  receiver.  Of  course,  when  there  is  but  one  bill  or  perhaps  two,  it 
does  not  appear  so  disadvantageous,  but  whenever  the  purchases  of  the 
month  mount  into  the  hundreds  of  dollars,  and  perhaps  as  many  invoices  it 
becomes  a  matter  of  serious  discomfort. 

Next,  and  by  no  means  least  in  importance,  is  the  fact  that  the  invoices 
for  goods 'purchased  should  by  all  means  be  kept  separate  from  the  receipts 
for  payment  to  facilitate  ready  reference  which  is  so  often  required  in  any 
business  house  to  ascertain  prices  paid  at  a  given  time,  or  quantity  or  quality 
of  goods  purchased.  Where  all  of  these  bills  have  been  carried  into  the 
permanent  receipt  files,  and  their  identity  lost,  except  as  a  receipt  for  pay- 
ment of  account,  it  becomes,  if  not  an  impossibility,  a  very  irksome  task  to 
seek  for  invoice  should  it  be  required. 

27 


Some  of  the  railroad  companies  and  perhaps  other  corporations  com- 
bine the  first  and  third  styles  of  vouchers.  The  Wabash  railroad,  for 
instance,  issues  a  voucher  (in  duplicate)  for  each  bill.  One  of  these  is  sent 
to  the  creditor,  with  this  endorsement:  "This  voucher  when  properly 
receipted,  becomes  a  sight  draft  upon  John  Doe,  Treasurer.  Payable 
through  Clearing  House."  Just  imagine,  two  of  these  vouchers  for  each 
bill ;  the  original  with  bill  attached  is  filed  in  its  proper  place  in  the  office 
of  the  company.  The  one  with  bill  attached  being  called  the  original,  how 
does  the  duplicate  voucher  (so  called)  differ  from  a  check?  In  a  great 
corporation  like  the  Wabash  railroad  what  an  immense  volume  of  seemingly 
useless  work  is  made  for  some  one.  Of  course,  it  may  be  argued  that  all 
of  this  "red  tape"  gives  employment  to  just  so  many  more  clerks  and  book- 
keepers, and  while  this  is  true  it  does  not  follow  that,  because  it  has  this  very 
salutary  effect,  it  is  an  example  of  the  best  book-keeping. 

When  we  are  studying  a  system  to  gain  an  idea  of  its  advantages  and 
defects  and  how  its  application  may  be  made  to  improve  its  science  of  book- 
keeping, it  will  not  do  to  lose  sight  of  the  fact,  at  all  times,  that  the  best 
book-keeping  in  the  world  is  that  which  gives  all  of  the  desired  results  with 
the  least  amount  of  labor  and  the  fewest  number  of  entries.  Book-keeping 
may  be  theoretically  correct  and  still  four  times  as  many  entries  made  as 
are  actually  needed.  A  better  book-keeper  taking  charge  of  such  a  set  of 
books,  will  have  them  just  as  accurate  in  every  particular,  and  will  not  spend 
one-half  of  the  time  of  his  predecessor  or  use  one-half  of  the  space. 

In  carefully  comparing  the  various  systems,  it  seems  that  an  even  better 
one  than  any  I  have  mentioned  could  be  evolved.  It  would  be  a  simple 
receipt  in  itself,  but  would  be  consecutively  numbered,  and  treated  exactly 
at  the  papers  used  in  the  voucher  systems  now  used  are;  being  of  a  uniform 
and  proper  size  to  fit  your  receipt  files;  the  number  being  placed  opposite 
the  entry  on  the  credit  side  of  your  cash  book;  then,  when  this  voucher  is 
returned,  all  of  them  could  be  numerically  filed  for  instant  reference.  If 
thought  of  advantage  the  file  number  of  the  voucher  could  be  placed  upon 
each  invoice  covered  by  said  voucher  with  blue  pencil.  The  form  might  be 
very  simple  and  still  carry  with  it  all  of  the  advantages  of  the  more  volum- 
inous plans,  with  but  very  little  labor  added  to  the  plan  which  now  uses  no 
voucher. 

Why  should  not  such  a  voucher  answer  all  of  the  requirements  of  the 
voucher  system,  and  still  be  simple,  cheap,  requiring  but  little  extra  time  and 
labor  and  necessitating  no  extra  expense?  I  think  it  would  prove  in  every 
way  as  efficacious  as  its  more  cumbersome  brother.      C  .A.  Sweeteand. 


28 


Yours  for  Only  $1.00! 


NINTH  EDITION  NOW  READY! 


Nearly  $90,000  Worth  Sold  in  Twelve  Months  ! 


The  American  Business  and 
Accounting  Encyclopaedia 

This  great  Business  Reference  Bonk  has  had  a  larger  sale 

in  12  months  than  any  other  hook  for  business 

reference  has  ever  reached. 

$90,000.00  WORTH  SOLD 


IT  IS  TO  THE 

BUSINESS   OFFICE 

what  the  Century 
Dictionary    is  to  the  Library. 


KSS 


Equally   valuable    to  Business 

Men,  Public  Accountants, 
Office  Managers,   Credit  Men, 
Cashiers,   Book-keepers,  Etc. 


NINTH   EDITION 

Yours  for  Only  $1.°° 

BALANCE    IN    SMALL    INSTALLMENTS.  ** 

Special  systems  devised  for  more  than  eighty  different  kinds  of  businesses. 

Hundreds  of  "short  cuts"  and  labor-saving  methods. 

Eight  hundred  illustrations  of  all  kinds  of  forms  and  books,  loose  leaf  and 
card  records,  used  in  business. 

The  science  of  auditing  fully  explained. 

Up-to-date  Commercial  Law  Dictionary,  with  latest  decisions. 

No  such  work  has  ever  been  offered  to  the  public  before,  either  in  the  United 
States  or  elsewhere,  and  at  the  terms  offered  it  will  soon  be  on  every  desk  as  a 
book  of  hourly  reference. 

Price  810.00,  payable  $1.00  down  and  balance  in  equal  monthly  installments. 
Cash  Price,  $8.00 

The  Encyclopeedia  is  indexed  alphabetically  and  topically  so  as  to  provide 
instantaneous  reference  on  any  subject ;  handsomely  bound  in  full  Russia  bind- 
ing, with  gold  embossing  and  gold  top,  printed  on  fine  paper,  1,100  pages, 
dimensions  9  x  11  inches,  weight  about  15  pounds. 

Every  purchaser  will  receive 

Free  of  Charge  a  Year's  Subscription  to  The  Book-Keeper 

A  modern  200-page  monthly,  giving:  practical  and  complete  instruction  in  Book-keeping-,  Shorthand,  Law, 
Higher,  Corporation  and  Cost  Accounting,  Banking,  and  Lightning  Calculations.  Its  business  pointers 
are  valuable  to  all,  both  employer  and  employee,  in  any  and  all  commeraial  lines.    Price,  SI  .00  a  year. 


Sent  by  express  on  receipt  of  order      F.  O.  B.  Detroit. 


The  Book-Kccper  Publishing  Co.,  Ltd., 

61-69  West  Fort  Street.  v*  v<  DETROIT.   MICHIGAN. 


The  information  in  regard  to  Proof  Systems  and  Sectionalization,  Manufacturing  Cost 

Systems,  Inventories  and  Stock  Accounts,  and  Card  Systems,  is  alone  worth  the  full  price 
of  the  book. 


INDEX. 


ACCOUNTING    SYSTEMS    FOR    DIFFER- 
ENT   BUSINESSES. 

Accountants   24 

Agents'    Accounts    68 

Agricultural    Implement    Business    80 

Assignees'  Business  122 

Architects'    Business    101 

Attorneys'  Business  124 

Auctioneers'      Business 151 

Banks  175-234 

Bakery  Business  162 

Cemetery  Accounting  304 

Church    Accounting    312-313 

City   Accounting    314 

Clearing  House  321-324 

Clothing  Business   325-326 

Club   Accounting    327 

Coal    Business    328 

College  Accounting  335-336 

Colliery  Accounting    336 

'Consignment  Business  346-347 

Contractors'    Accounts    354 

Corporation  Accounting  359-374 

Cotton  Mill  Accounting   3S2-3V3 

Creamery   Business    384-390 

Custom   House  Accounting   397 

Cost  System  for  Boot  &  Shoe  Business  53S-541 
Cost    Record    for   Agricultural    Imple- 
ment Business  542-544 

Cost  System  for  Metal  Manufacturing 

Company   514-546 

Cost    System    for    Machine    and    Tool 

Works    Company    546-554 

Cost  System  for  Bicycle  Manufactur- 
ing Business 570-574 

Doctors'    Business    879 

Department  Store  426-448 

Drug  Business   473-476 

Educational  Association  4S0-4S1 

Executorship  Accounts  525-529 

Fish   Business    (Wholesale)    596-604 

Flour    Milling    Business 605-606 

Foundry  and  Machine  Shop  620-621 

Fruit  Growers  Business  622-624 

Gas  Business  625-632 

Grain    Business   637-642 

Grain  Elevator  Business  642-648 

Grocery  Business  648-664 

Hardware  Business   666-680 

Hospitals  678-680 

Hotel    Business    680-691 

Ice   Business    693-699 

Installment  Business   707-712 

Institutions    712-720 

Insurance    Agency    720-722 

Iron   and   Steel   Business    741-742 

Jobbing    Business    742-744 

Laundry    Business    747 

Libraries    752-753 

Life  Insurance   753-761 

Livery  Business  762-764 

Lumber    Business    766,  980-985 

Mall    Order    7S0-788 

Manufacturing  Business  (General) 529-581 

Mining  Business  808-827 

Municipal  Accounting  314,  830-833 

Newspaper  Business  834-836 

Oil  Business  839-843 

Paper  Manufacturers  80I-86O 

Personal  Accounting  876-878 

Physicians'    Business    879 

Picture  Publishing  Business   881 

Plantation   Business    883 

Plumbers'   Business  » 887 


Printing  Business 896-898 

Publishers'    Business    355-919 

Real   Estate    925-945 

Receivers'   Accounts    947 

Retail  Business   9uO-95S 

Savings   Banks   966-979 

Schools    9S6-9&7 

Saw  Mill   Business   980-985 

Shipping   Business    990-991 

Societies 995 

Steam  Railroad  1000-1018 

Storage  and  Hardware  Business ^-1 


Telephone   Companies 
Theaters  


1027 


Voucher  System  263,  264,  1051-1058 

Water  Works   1059-1065 

Workroom    1066-1070 

SPECIAL  ACCOUNTING   METHODS. 

Accounts  Payable   36 

Accounts  Receivable  Discounted 122 

Accounts  Receivable  35 

Adjustment  Account  163 

Auditing  System  Condensed   133 

Balance   Sheet    162 

Bank   Account    174-175 

Bills   Receivable   249-251 

Boston  Bank  Ledger  163 

Cash  Sales   131,303 

Cash  293,  294,  295-300 

Cash  and  Bank  Account  25,  297-298 

Changing  Single  to  Double  Entry 992 

C.   O.  D.   Records  302-303 

Collections    331-335 

Consignment  Accounts   346-347 

Daily  Balance   Sheets  (Savings  Banks)..    977 

Delivery    Wagons    162-163 

Duties  of  Permanent  Auditor  of  Cor- 
poration     141 

Expense  Account,  Distribution  of  523-525 


Filing   Correspondence 
Havlll  Bank  Ledger  ... 


Installment  Collections  

Insurance  Solicitors'   Record   

Inven  torv     101, 

Inventory,  Boot  and  Shoe  Trade  

Invoices   Received    

Invoices,   Keeping  Track  of  

Mail    Order    

Paying   Help    

Pay  Roll    866 

Pay     Roll     for    Hardware    Manufactur- 
ing Company  

Pay  Roil  for  Tannery  

Petty    Cash    

Piece   Work    

Postage  Account   

Posting   

Private  Ledger  

Purchase   Record    


Rent    Accrued    Due    918 

Retail  Accounting  Without  Ledger  Ac- 
counts    950,  etc. 

Reverse    Posting    959-963 

Sales  Book  (Lumber)  767 

Sales    (Lumber)     770 

Salesmen's    Record    1037,  1038 

Time  Records   

443,  444,  557.  558,  564,  565,  566,  667,  668,  778,  779,  883 

Workroom    433-434 

FORMS  AND  TABLES. 

Acceptance    7 

Accounts  of  Receipts  and  Disbursements 
(Building  and  Loan  Association) 281 


Account  Sales   (Grain   Business) 639 

Accountants'  Day  Book  24 

Accountants'   Diary -1 

Acknowledgment   Before    Notary 37 

Acknowledgment  of  Order   674 

Adiustment    Account     

10,  42,   43.  44,   45.  313,   447,   653,  988 

Advertising  Contract  Record  64 

Advertising  Cost  and  Profit   Statistics. .  .54,  55 

Advertising  Monthly   Analysis   55 

Advertising  Monthly  Summary  54 

Advertising  Records  54,  55,  56 

Advertising    Record    and    Journal    Com- 
bined    65 

Agents'    Sales   Record    68 

Amendment   to   Articles   R5 

American  Balance  Sheet  168 

American  Experience  Table  '59 

Amortisation  of  Lease  R8 

Annual  Statement  441 

Anticipating  Bills  95,  97 

Appraisers'  Monthly  Report  39s? 

Articles   of    Association    107,175 

Articles   of  Co-partnership    115 

Assessment  Notice   U7 

Assessment   Record    118 

Auditor's  Abstract   Summary    134 

Auditor's  Certificate   140 

Auditor's    Daily    Report 439 

Auditor's   Journal    315 

Auditor's   Report    127 

Audit  Note  Book   «8 

Auxiliary  Cash  Book   652 

Average  of  Storage  Charges  154 

Balance  Ledger   161,  279,  442,  750,  970.    98$ 

Balance  Ledger  (Bank)   1X8,199.200,    988 

Balance   Sheet    168.  109    170.  173.  214. 

22S,  244,  268,  370,  :!72,  374.  145.  486.  495.  653,  663, 

685,  687.  6s9,  (.90.  70J.  756,  810,     S77 
Balance    Sheet    (Building   and    Loan    As- 
sociation)     281,    283 

Balance  Sheet  (Grain  Elevator)    647 

Balance  Sheet    (Life   Insurance   Co.) 756 

Balance  Sheet    (Municipal)    831 

Balance  Sheet   (Railroad)    1009 

Bank  Balance   Sheet    214,    228 

Bank  Cash  Book  188 

Bank  Clearing  House  Due  Bill   217 

Bank  Collection    Register    193,    226 

Bank  Collection    Tickler    209 

Bank  Credit  Report  225 

Bank  Customers  Signatures  (2)    227 

Bank  Discount    Register   190 

Bank  Eoreign    Collection    Book 209 

Bank  Foreign  Credit  Book   209 

Bank  Insurance  on  Collateral 226 

Bank  Journal    188 

Bank  Liability   Ledger    192 

Bank  Note  Tickler  192 

Bank  Offerings   Book    191 

Bank  Paving   Teller's   Settlement   Book..    218 
Bank  Receiving  Teller's  Settlement  Book    219 

Bank  Receiving  Teller's   Statement 219 

Bank  Reconcilements  231.  232,  233,    234 

Bank  Statement    214,228,    978 

Bank  Stock   Certificate   224 

Bank  Stock  Ledger  1*7 

Bank  Stock  Transfer   203 

Bankruptcy  Statement  243 

Barge    Register   244 

Bill  Book  545.  600.    887 

Bills  Receivable  Account  250 

Bills  Receivable  Ledger 250.    2>1 

Bills  Receivable  Record  (Insurance) 750 

Bills  Receivable   Register  and  Ledger —    250 

Bonded  Stock   Ledger   253 

Boston    I'.:1lai;ce    L-dger    188,  200,     985 

Branch  Office   Balanci    Sheet  267.    268 

Brewery  Ledger   ;    269 

Brewery  Bales   Book  269 

Business  College  Cash  Book  o01 

Capital   Account    244,  483 

Car  Records  828 

Carload  Record  (Mining)  (2)  812 

Carting  Cash    Book    291 

Carting  289 

Carting  Order  Form  290 

Cash  Account   293,  296 

Cash  Adjustmeni   800 

Cash  Balance  296 

Cash  Books   257.  'Jul.  296.  2W,  ■::<:>. 

145,  446,  447.  474,  602,  651,  721,  722 

Cash   Hook   (Auxiliary)    652 

Cash  Book  (Pink)   188 


273 


278 
620 
646 
584 
972 


Cash  Book  (Building  and  Loan  Associa- 
tion;   

Cash  Book.     Secretaries     (Building    and 

Loan  Association)   278 

Cash    Book.     Treasurers    (Building    and 

Loan    Association    

Cash  Book    (Foundry)    

look  (I  train   Elevator)   

Cash  Book  (lnsurana  I   

Cash  Book  (Savings   Bank)   

Cash  Book  (Water  Commission)  1063 

Cash  and  Charge  Tickets  Summary 437 

Cash  Journal  303,312,661.    954 

rournal  (Life  Insurance)  (2)  Inserts 

Cash  on  Delivery  Ticket    436 

Cash  on  Delivery  Book   <;01 

Cash  on  Delivery  Record  436 

Cash  Ticket    434 

Cash  Ticket  Summary  437 

Certificate  of  Siock  305 

Charge  and  C.  O.  D.  Tickets  Summary...    437 

Check  Figure  System   310 

Check  Register    308,  3o9,    660 

Church  Cash  Journal  312 

Church   Subscription  Book  and   Ledger..    312 

City  Pill  Record 314 

Contracts   Currents  Average  Method loO 

City  Journal  316 

City  Ledger  Balance  Account  6o3 

City  Order  Form  316 

Clearing  House  Credit  Ticket     322 

Clearing  House  Debit  Ticket   323 

Clearing  House  Delivery  Clerk  Statement    322 

Clearing  House  Due   Bill    217 

Clearing  House  Paid  Stamp   321 

Clearing  Plouse  Proof  Sheet  322 

Clearing  House  Receipt    323 

Clearing  House  Slip   323 

Coal   Record   32* 

Collateral  Insurance  Record  226 

Collection  Installment  Report  7)0 

Collection  Records  226,    95$ 

Collection  Register  193,    332 

Collection  Register  (Bank)   1»J 

Collection  Tickler  (Bank)   2-.y 

Columnar  Cash   Book.  .296.  297,  298,  301,  651,    9-2 

Columnar  Journal    74. 

Columnar  Records    1054,  1U58    (21 

Colmunar  Sales  Books  9t>8 

Combined    Balance   Sheet   2' s 

Colllerv   Cost  Sheet   826 

Combined  Cash  Book  and  Check  Register  6b0 
Combined  Collection  Register  and  Diary.  332 
Combined  Credit  Ticket  &  Cash  Voucher  437 
Combined  Voucher  and  Check.... 1052-1057.  105s 

Commercial  Reports    337 

Commercial  Statements    s2* 

Commission  Account  '■" 

Comparative  Balance  Sheet  9*2 

Comparative  Financial  Statement  341,  900,  1Mb 

Comparative  Percentages    — * 

Comparative  Sales  Record  9->5 

Comparative  Statement    681,682  900,  lt'4- 

Computing  New  Balances   9>9 

Consignment.  Journal   t>H 

Consignments   Received    431 

Continental  Balance  Sheet  1<> 

Contract  Register  101 

Cost  Book  *54 

Cost  Card     533 

Cost  Journal    434 

Cost  Ledger    642 

Cost  Records   ..540,541,    653 

Cost  Register    858 

Cost  Sheet    &43 

Cost  Sheet    (Gas)    631 

Cost  Summary  533.    552 

u     ior  I  vhciiture  Bond  419 

(  'oupon    Kegisli  r    s;3 

Creamery   Pin an(  ial  Statement  3js5 

Creamerv  Sales  Ledger  388 

Ri  ports  225.    333 

Credil  Summary   438 

Cr<  dii   Tii  ket   84,    392 

n  House  Appraiser's    Report 398 

Custom  House  invoice  Record     (2>    4iK3 

i  House  Transfer   Hook   401 

I  "87 

Customers'  Order  Index  Cards 561 

I   834, 

Customers'  Signature  Record  (Bank).. (2)    227 

Daily  Cash  Balance  407 

Daily  Time    Sheet    56o 

Day  Work  Time  Card  ^ 66< 


Debenture  Coupons    419 

Debenture  Coupon  Bond *n* 

Debenture  Register    **0 

Debenture  Statement    • ;>-" 

Dedication  Paper  (Real  Estate)   93a 

Deficiency  Account  •• :--    4" 

Delinquents'    Register    (Water    Commis- 
sion)      MM 

Delivery  Rook  ?9' 

Delivery  Receipt  °pJ 

Delivery  Ticket    jjb 

Department  Abstract  (Monthly) 4J9 

Department  Account    447,    47b 

Departmental  Accounts  (Motel)   091 

Department   Financial    Statement 441 

Department    Profit  and  Loss  Account —    427 

Department  Shipping  Order   67* 

Depar;ment  Stock  Account  4Z7 

Department  Stock    Ledger    440 

Department  Summary    432 

Department.  Transfer  Analysis  440 

Depreciation  Account   ^57 

Depreciation  Fund  Account 4S6 

Depreciation  Tables   450 

Discount  Register  (Bank)  190 

Distribution  of  Expenditure  (Water  Com- 
mission)      1065 

Dividend  Book   122 

Double  Account  Balance  Sheet  169 

Double  Averages   (7)  155,    160 

Dues  Ledger  99o 

Electric  Light  Accounts  Classification —    4.>3 
Electricity    Generated    and    Sold    (State- 
ment, oi)  487 

Employes'  Purchase.  Book  442 

Employes    Record  Card   557 

English     Registered     Company     Balance 

Sheet    169 

Equipment  Account  (Mining)  817 

Estimated  inventory  738,    740 

Expense  Bill  Record  813 

Expense  Distribution   524 

Express  Receipts  Records  m. 590 

Factory  Diagram  531 

Factory  General  Journal  531 

Factory  Order  5o0 

Factory  Symbols 5>0 

Family  Ledger 697 

Famiiv  Record   (Ice)    697 

Financial  Statement   313,341,    445 

Financial  Summary    997 

Fire  Insurance  Agency   Register    o9l 

Fire  Insurance  Average  Clause  69o 

Fire  Insurance.  Cash  Journal  b92 

Fire  Insurance  Customers'    Ledger    592 

Fire  Insurance  Record  589 

Foreign  Advertising  Register  835 

Foreign  Credit.  Book  (Bank)    209 

Foreign  Collection  Book  (Bank)  209 

Foreman's  Instruction  Card  502 

Foreman's  Order 549 

Forwarded  Abstract  (Railroad)    1007 

Foundry  Order  543 

Foundry  Order  Stub   o48 

Gas  Company  Cost  Sheet  6.1 

Gas  Ledger    (2)    626 

Gas  Register    ••    626 

Gas  Repair  Record:-;  627-630 

General  Sales  Expense  858 

Grain  Deposit  Register   60a 

Grain  Individual  Account  640 

Grain  Ledger  60a 

Grain  Summary  60b 

Guarantee  Company  Warrant   930 

Guests'    Record    6S2 

Hands'  Pay  Roll  and  Ledger 883 

Hospital  Records  67h,    0(9 

Hotel  Guests'  Record   682,    684 

Ice  Delivery  Book  697 

Ice  House  Manifest  69d 

Tee  Order    < 697 

ice  Platform  Report  69b 

Ice  Record  and  Ledger  697 

Impression   Book   '. Hi' mi  inni 

Income  Account    496,  534,  1004 

Income  and  Expenditure  Account 244,    701 

Income  and  Expenditure  Account  (Insur- 

a  nee)  ' 

Income  and   Expenditure    Account    (Real 

Estate)  "* "^ 

Individuaf  Cashier's  Record 437 

Inspectors'  Track  Book  (Grain  Elevator)    646 
Installment    Collector's    Report..........;.    710 

Installment  Ledger    708.709    711 


Institution  Supplies  Record  (2)    713 

Institution   Supplies  Summary    ^741 

Interest  Account  (Building  and  Loan  As-« 

sociation)    281 

Interest  on  Daily  Balances  '31 

Insurance  Account  7o7 

Insurance  Solicitor's  Record  760 

Insurance  Statements  «s4 

Inventory     005  606,738,739,    801 

Inventory  Account  271,    737 

Inventory  Sheets    73b 

Invoice   abstract    Book 601 

Invoice  Analysis    431 

Invoice  Ledger   <41 

Invoice  Record   400 

Invoice  Stamp  '40 

Iron  Cos:   Sheet  '42 

Iron  Stock  Account  743 

Joint    Stock    Company    (Insurance    Cash 

Book)    584 

Joint  Stock  Insurance  Statement   584 

Journals    256,  314,  409,  531,  649,  654,  745.    954 

Journal  (Bank)    1»8 

Journal  (Factory)    o31 

Journal  (Lumber)  '78 

Journal  (Real    Estate)    926 

Judgment  Note    746,  903 

942 
816 

88 


ul5 


312 
316 

,-,12 


Land  Accounts    

Land  ana  Property  Accounts  (Mining)... 

Lease  Account  

Ledger  

Ledger  (Balance) 

...   164,  199,  200,  279,  442,  750.  970, 

Ledger  (Brewery)    269 

Ledger  (Church)   

Ledger  (City)  

Ledger  (Cost)    

Ledger  (Department   Store) 440 

Ledger  (Family)    697 

Ledger  (Flour  Mill)   605 

Ledger  (Gas)    (2)    626 

Ledger  (Hotel) 682 

Ledger  (Insurance)  392 

Ledger  (Members)   312 

Ledger  (Petty  Sales)  2o7 

Ledger  (Real  Estate)   94o 

Ledger  (Sales)    257,388,650.658,    962 

Ledger  (Stock)    187,    367 

Ledger  (Tenants)   \irYA'    93 

Ledger  Proofs  258,  441,    442 

Letter   Purchase   Order    ......    670 

Liability  Ledger  (Bank)  192 

Life  insurance  Table  '59 

Livery  Board   Book    763 

Livery  Long  Hire  Book J63 

Livery  Short  Hire  Book  '62 

Loan  Capital  (Statement  of)   482 

Machinery  Tags    804 

Mail  Order  or  Cash  Record  ••    436 

Mall  Order  Records  787,     '84 

Mail  and  Stores  Sales  Record  438 

Main  Office  Balance  Sheet 2b8 

Manilla    Mill   Account 859 

Manilla    Mill    Report 859 

Manufacturing  Account   10b7 

Manufacturing  Analysis  Book  438 

Manufacturing  Book  (Clothing)  326 

Manufacturing  Expense  Account 856 

Manufacturing  Purchase  Summary   439 

Manufacturing  Ticket    433 

Manuscript  Record  •••    805 

Material  Card   852.  (3)  8a3.  (2)    854 

Maturity  Record  *0o.  921,    924 

Members'  Ledger  and  Record  312 

Merchandise  Account  '37 

Merchandise  Coupon   872 

Mercantile   Balance  Ledger <50,    9S8 

Meter  Records  629,  (2)    630 

Metered  Water  Register 1061 

Metric  Measures  807 

Mining  (Carload  Record)  (2)    812 

Mining  Output    (Record   of)    811 

Mining  Sales  Record   vv'I'U    S  Z 

Monthly  Comparative   Statement  (Hotel) 

Mo  n't  hi y  Departmcn t  Abstract  , 429 

Monthly  Statement   827,  828 

Mortgage  Record  .- »■" 

Mortality  Table  759 

Municipal  Balance  Sheet  831 

Mutual  Insurance  Cash  Book 584 

Mutua)  Insurance  Company  Statement...  684 

Net  Revenue  Account  485 

Newspaper  Carriers'  Record  835 


Newspaper  City  Subscription  Record. 

Newspaper  Daily  Register  

Note  Tickler   (Bank.)    


Offering:  Book  (Bank)  l'Jl 

Office  Order  Book  549 

Office    Transcript    550 

Opening    Entries    359,  373 

Opening  Entries   (Mining)    815,816,  821 

Operating  Expense   Statement 489 

Option  Ledger  638 

Order  Blank    64\  656,  845-848 

Order  Book    852 

Order  (lard     548 

Order  Register     656 

Out  W'orK  Time  Card  564 

Part  Stores  issued  Card  563 

Patientb    Record   678,679  879 

Pa  t  tern    Record 790,  792,  793 

Pay  Roll  Book   

534.  772,  866,  867,  868,  869,  (2),  87u,  871,  873 

Pay  Roll  ana  Ledger  Combined 8S3 

Bay  Roil  Summary     870 

Paying  Tellers'  Settlement  Book   218 

Peddlers'   Delivery  Book   599 

Peddlers'  Sales  Book  598 

Personal  Account  Book  875 

Petty  Saies   Ledger   257 

Physicians'  Combined  Record  and  Ledger  879 

Piece  Work  Record  852,  882 


566 
564 
696 
721 
564 
69 
856 

877 


685 
903 

442 
917 
9s2 
442 
654 


Piece  Work  Tickets   

Piece  Work  Time  Card  

Platform  Report  (Ice)   

Premuim  Register  

Premium  Time  Card   

Pro  Forma  Journal  Entries 

Productive  Labor  Account 

Profit  and  Loss  Account 

282.  428,  445,  489,  663,  690, 

Profit    and    Loss   Account    (Building   and 

Loan  Association)   282 

Profit  and  Loss  Account  (Ship  Business).    990 

Front  and  Loss  Statement  f.53, 

Promissory  Notes   9u2, 

Proof  Book    258, 

Protest   (Certificate  of)   

Purchase  Book  .   2o6,  672, 

Purchase  Book  (Employes)  

Purchase  Journal  428, 

Purchase  Journal  and  Ledger  Combined.    922 

Purchase   Ledger   741 

Purchase  Record  314, 

310,  474,  620,  672,  921(3),  924  (3),925,  (3),  1054 

Quotation  Book  802 

Quotations  Received  Book  803 

Quotation  Record    957 

Rated  Water  Bill  1064 

Rated  Water  Register  1062 

Real  Estate  Diagram 938 

Real  Estate  Ledger  945 

Receipt  Book  (Building  and  Loan  Asso- 
ciation)      280 

Received  Sales  Record  6U2 

Receiving  Teller's  Settlement  Book  219 

Receiving  Teller's  Statement    219 

Receipts  and  Disbursements  Accounts 

281,  282.  752 

Receipts  and   Payments  Accounts 701,  946 

Reconcilement   Statements   (5)231-234 

Record  of  Advanced  Invoices  4U0 

Record  of  Expense  Bills  (Mining)  813 

Record  of  Quantity    271 

Ri  i  ord  of  Mining  Output   811 

Register  of  Hospital    Patients 678,  679 

Register  ot  Share  Application  and  Allot- 
ments     84 

Registration  Book   6S4,  930 

:    and    Shipping   Book    (Grain 

Elevator)  645 

tance  Blank  432 

Ri  ii  hi     Accouni   St>7 

in    Moms    Record   627,  62.8 

i     and  Sales  Book  621 

Repair   'l  icket     .".7:; 

Report  of  Finished    Product...;...;;;; 855 

Report  of  Receipts  and  Shipments 856 

i    \<  ■"  ml 486 

Ri  cord   I 1  Irewery)   270 

ii    Accouni   484 

Recapitulation  960 

Po  ting  Slip  

Salary  Book  44:: 

Uistract  Book   597 

•  «<  Blotter    8*9 


Sales  Book    256,  446.  598,  621,  966 

Sales  Book  (Brewery)     269 

Sales  Clerks'  Summary  435 

Sales  Journal  649 

Sales  Journal  (Lumber)    776 

Sales  Ledger   257.  388.  650,  658,  962 

Sales  and    Purchase    Book    (Grain    Busi- 
ness)      638 

Sales  and  Purchase  Record  638 

Saks  Record    656 

Sales  Record  (Bakery)  162 

Sales  Record  (Brewery)    270 

Sales  Record  (Mining)   812 

Sales  Record  and  Ledger  Combined 162 

Sales  Record  by  Provinces   250 

Sales  Tickets    618,  77/ 

Sales  Ticket  (Lumber)   77* 

Salesmen's  Commission.  Account   1034 

Salesmen's  Records   .  ■ 1038 

Scraj)  Book  987 

Secretary's    Cash     Book     (Building    and 

Loan   Associations)    278 

Settlement  Book   638 

Settlement  SUi)  651 

Share  Capital    (Statement   of)    482 

Shipping    Advice    628 

Shop  Order    534-541 

Shop  Order  Record   551.  552 

Single  Average   155,  159 

Smelter  Account     (Mining)   816 

Sorting  Record  851,  852 

Special  Orders  Index   Cards    561 

Special  Working  Order  669 

State  Insurance  Certificate 758 

Statement  of  Assets    and    Liabilities 

243,334,  372 

Statement  of  Assets  and  Liabilities   (In- 
surance)    '. —  756 

Statement   of   Eiectricity   Generated  and 

Sold    487 

Statement  of  Loan  Capital  482 

Statement  of  Share   Capital    482 

Standing  Order  Card  569 

Standing  Working  Card  .  669 

Statistical   Record    772 

Stewards'  Records  (Hotel)  683 

Slock  Application  and  Allotment  Regis- 
ter    84 


Stock  Book    571. 

Stock  Book  (Clothing)    

Stock  Book  (Grain    Elevator)    

Stock  Book  Summarized    

Stock  Certificate  Book  

Stock  Ledger  187.367.440, 

Stock  Ledger  Proof  Balance  

Stock  Order  i>oo. 

Stock  Order  Index  Cards 

Stock  Records    203,532  (2), 

Stock  Register   

Slock  Subscription  366. 

Stockholders'  Receipt  Book 

Stores  Charge  Slip  

Stores  Credit    Slip    

Store  Fixtures  Label   

Stores  Monthly  Balance  Sheet  

Stores  Order  Index   Cards   

Stores   Purchase  order  794,795.796. 

Stores  Required  Card   

Stores  Requisition   

Stores  Returned  Card    

Stores  Stock  Book  

Store-keepers'  Instruction  Card 

Subscription    lost     366. 

Summary  Cost  Book  

Summary  of  Expense  

Sundry  Customers'  Accounts  

Sundry  Purchase  Ticket  

Suspense   Ledger     1024,  (2) 

Sj  mbols  (  Factory)  

Tabular   Ledger  164, 

269,  312,  692,  6.97.  708,  711.  750,  943.  945. 

Tabular  Ledger  <  Hotel)   

Tabular  Pay   Roll  

Tabular  

i  Title  Record  

Tena  nts  

Tenants'  Register  and  Ledger  Combined. 

Three  Column   Ledger  ( Bank)   

Time  Card     534,  542,  667, 

77S,  779,  852,  853  (3),  RSI  (2),  855  (5),  871,  897, 

Tlmi    i  i".  k    Record  sheet  

Time  Record  

Tune  Record  Book    

Time  Record  (Lumber)   

Time  Sheet    


852 
325 
643 
1021 

224 
713 
4  41 
566 
^,\ 
1013 
364 

,VM 

280 


546 
561 
797 
563 
797 
563 
545 
562 
823 
1070 
1000 
1022 
432 
1025 
580 


269 
930 
943 
945 
199 

1029 

1029 

,.67 
779 
443 


Time  Wages  Book  667 

Trade  Inquiry  Form  1032 

Trading  Account  476,  1033,  1034,  1067 

Transfer  Book    4ol 

Transfer  Card   435,    567 

Transfer   j-ntry    672 

Transfer  Entry    Book 673 

Travelers'  Order  t>70 

Traveling  Salesmen's  Accounts..  70,  71,  73,      74 

Traveling  Salesmen's   Report 333 

Treasurer's  Cash  Book  2/3 

Treasurer's  Receipt  Book  280 

Trial  Balance  ...448,  476,  653,  876,  1004,  luorf-lu46 

Trip  Account  '0 

Trust  Company  Statement  1049 

Turnover 476,  1049 

Vouchers  655,  671,  1053-1056,  1057,  1058 

Voucher  Cash  Book  (.Water  Commission)  lu63 

Voucher  Record  (2)  I0o4-1058 

Voucher  Register  336  Insert 

AUDITING. 

Abstract  6 

Account  Book  Analysis   J 

Accountant's  Certificate  22 

Adjustment  Account  41 

Anticipated  Profits   354 

Arbitrary  Entries  128 

Arbitrary  Posting ...  88 

Audit,  Definition  of  125 

Auditor's  Assistants  140 

Auditor's  Attitude  lf» 

Auditor's  Certificate  140 

Auditor's  Duties    136 

Auditor's  Qualifications   l« 

Auditor's  Responsibilities    131 

Auditing  System  Condensed  133 

Auxiliary  Cash  Book  12b 

Balance  Sheet  174 


Banking 


235 


Bank  Deposits  l-jjj 

Bank  Vouchers *« 

Book-keeper's  Attitude  to  Auditor 139 

Books  to  be  Audited  "6 

Cash  and  Bank  Account 127 

Cash  Blotter  fol 

Cash  Sales  131 

Checking  Additions   ••••    3Ji 

Check  Marks  127,    308 

Checking  of  Postings  126 

Condensed  Auditing  System   133 

Contingent  Assets  and  Liabilities 3j1 

Corporation  Auditing 135 

Customers'  Accounts 128 

Contracts  Unfinished   353 

Definition   of  Audit    •■•    125 

D2preciation   21,    132 

Discount    .' I28 

Expenses  21 

Fraudulent  Errors  128 

Individual  Check  Mark  308 

Insurance   Unearned   327 

Interest  Accrued  327 

Ledger  Analysis 88 

Location  of  Errors  129 

Market  Values  132 

Note  Book  837 

Orders  Uncompleted  353 

Partnership  23 

Pay  Roll  129 

Percentages  ■••••• £> 

Percentages  on  Cost  of  Production 21 

Petty  Cash  131 

Preparation  for  Audit   893 

Proprietor's  Attitude  to  Auditor  139 

Purchase   Accounts    128 

Recapitulation  Sheet  88 

Real    Estate    21 

Repairs   tii 

Reserve  for  Bad  Debts  .•••• 

Rules  for  Conducting  Investigations 

Savings  Bank  Pass  Books  

Scope  of  Audit  i,"LVU:; i9« 

Statistical  Reports  and  Exhibits 12b 

Testing  Purchases  20 

Testing  Sales f 

Transfer  of  Business  Undertakings 22 

Transfer  of  Footings  «» 

Turnover   

Unearned  Profits  133 


19 


Valuation  of  Assets  131 

Verifying  Inventory  20 

Verification  of  Profits  22,  132 

Verification  of  Assets  and  Liabilities —  174 

Verification   of  Bank  Balance 234 

Vessel  Account  Credits  991 

Vouchers    128.  129 

Vouching  Receipts    23 

Vouching  Sales   966 

Wages  Accrued  327 

INSERTS. 

Card   Ledgers    748-9,  750-1 

Cash  Journal   (Accident  Insurance)    <o4-5 

Combined    Cash    Journal    and    General 
Ledger  (Life  Insurance)    760-1 

Electric  Light  Journal   (Municipal) 830-831 

Municipal   Public   Works   Journal 832-3 

Statistical  Monthly  and  Yearly  Record..  998-9 

Voucher    Register     (Gold     and    Copper 

Mining    Company    1052-3 

Voucher    Register    (University    or    Col- 
lege)     1056-7 

Water  Register  (Municipal)  1062-3 

COMMERCIAL  LAW. 

Abatement   j> 

Abbreviation    5 

Abode  \ 

About  6 

Abscond   ° 

Absent    6 

Acceptance    912 

Accommodation  Papers  9 

Accord  and  Satisfaction  9 

Account  Book  34 

Accrued    37 

Accruing  Interest  37 

Acknowledge     37 

Acknowledgment    37 

Acquaintanace    **> 

Acquiescence    6° 

Acquittance  38 

Act  of  God  38 

Actual    3» 

Actual  Damage  ™ 

Actual  Delivery  % 

Agent   I* 

Agreed  '" 

Agreement '£ 

Aggregate  Corporation   3o8 

Allonge   " 

Allowance   \ 

Alteration   °* 

Amount    Covered  »< 

Amount  of  Loss  °' 

Annually    j 

Apportionment   <js 

Appraisement    ** 

Appropriation  of  Payments  1«J 

Approved  Endorsed  Notes  101 

Appurtenances    1°1 

Arbitration  ^6 

Arrears     

Articles  of  Agreement  ;'; 

Assets    ]:} 

Assign   \-\ 

Assignee  {-' 

Assignment   \-j 

Asignor     I5* 

Assured  J-* 

Attorn    ]-1 

Attorney    \r* 

Attornev  in  Fact  {;= 

Authentic  Act  }?- 

Authentication   }?- 

Authority    *** 

Backing    lj>l 

Bailment    "g 

Bank  Account  "5 

Bankable  234 

Bank  Notes  or  Bank  Bills  241 

Banks    527 

Bargain     $™ 

Barter    ^TT 

Bearer    g* 

Bid   %g 

Bidder   J™ 

Btlau  "*° 


BUI     245 

BUI  of  Credit  246 

Bill  of  Exchange  246 

Bill  of  Lading   248 

Bill  and  Note  Broker 2,3 

Bill  Payable  f 24y 

Bill  Receivable    24a 

Bill  of  Sale    251 

Blank  Indorsement  703 

Bond  251 

Breach  of  Trust 268 

Bribe   272 

Bribery   272 

Broker  2i3 

Brokerage  273 

Capital    287 

Capital  Stock  289 

Carrier  2~y 

Certain  Contracts 352 

Certified  Check  3U6 

Certificate  of  Protest  917 

Check  307 

Chose    313 

Chose    in    Action 313 

Chose  in  Possession  313 

Civil  Corporations  358 

Clerk  325 

Codicil   329 

Common  Carriers  338 

Compromise  342 

Concurrent  Consideration  343 

Conclusive  Presumptions  893 

Conditional  Indorsement  703 

Confirmation  342 

Confusion  of  Books  342 

Confusion  of  Rights 343 

Considera  tion  343 

Consignee  * 346 

Continuing  Consideration  343 

Contract  351 

Contracts  of  Record  351 

Contracts  by  Specialty 351 

Conveyance  354 

Copy   354 

Copyright   355 

Corporation    357 

Cost  382 

Coupons   383 

Covenant  383 

Credit  391 

Creditor   ia2 

Currency  393 

Current  Money  393 

Customs 393 

Custom  House 396 

Custom  House  Brokers  406 

Custom  of  Merchants  406 

Daily  406 

Date    410 

Day    411 

Days  of  G  race 412 

Dead  Letters  412 

Debt    421 

Deed    421 

Deficit    424 

Defraud    424 

Demand     425 

Deposit    448 

Discount  in  Contracts  466 

Dishonor    467 

Disputable  Presumptions  894 

Dividend  4,0 

Documents  471 

Draft    472 

Drawback  473 

Drawee   473 

Drayage  473 

Due    477 

Due  Bill   477 

Duplicate  477 

Earnest  478 

Earnings    4,8 

■■rations    358 

Eleemosynary  Corporations  358 

Embezzlement  518 

Employed   518 

Employe     518 

Endorse    519 

Engagement  519 

Bngn  iss  > 519 

Enhanced    519 

Entire  Contracts  352 


Entry   , 519 

Erasure  519 

Estoppel  522 

Evidence    522 

Exchange    523 

Exchange  Broker  273 

Executed   Contract   352 

Executed  Consideration   343 

Executory  Contract  352 

Executory  Consideration  343 

Express  Contract  352 

Face    529 

Factor   629 

False  Pretenses  581 

Falsification   582 

Fictitious  Payee  682 

Figures   582 

Finances    582 

Floating    Capital    604 

Floating  Debts  604 

Foreign     006 

Foreign  Bill  of  Exchange  247,  60C 

Foreign  Creditor    607 

Foreign  Trade    619 

Forgery    620 

Fraud  621 

Freight   621 

Future  Acquired  Property  624 

Future  624 

Gaming 624 

General  Authority  153 

Gifts    633 

Gold  633 

Good  Consideration   343 

Good  Faith   634 

Goods   634 

Goods  Wares  and  Merchandise 034 

Gratuitous  Contract 352 

Guarantee    664 

Guaranty  665 

Half  Year  666 

Handwriting    666 

Hazardous  Contract 353 

Holder  676 

Holiday    677 

Illegal  Contract  353 

Illegal  Consideration  344 

Impossible  Consideration  344 

Implied  Contract 352 

Income    70C 

Indorse    703 

Indorsee  703 

Indorse  in  Due  Course  703 

Indorsement  in  Full  704 

Indorsement    703 

Inland  Bill  of  Exchange  247 

Insolvency    707 

Insolvent   707 

Insurance  Broker  275 

Interest  722 

Interlineation    73c 

Joint    74* 

Joint  and  Several   744 

Judgment    746 

Judgment  Note   747 

Jurat  747 

Law  Merchant  747 

Lawful     747 

Lawful  Money  748 

Lay   Corporations    358 

Legal   Estate    750 

Legal   Tenner  751 

Letter  of  Credit    751 

Limited  Authority  153 

Liquidated  Account  762 

Merchandise   806 

Merchandise   Broker  273 

Merchantable  807 

Middleman  807 

Mixed    Presumptions    894 

Money   829 

Month    829 

Moral  Consideration   344 

Municipal  Corporations  359 

Negotiate    888 

Naked    Authority    153 

Negotiable    Instruments    833 

Negotiation   

Notes  of  Dishonor  837 

Notes  of  Protest  913 


On  Demand  843 

Open  Account  »* 

Order    844 

Overdraw    °j?" 

Overdue    °j?" 

Owing    b0i 

Paper  Money  *f] 

Par    §£" 

Parole    Contracts wf 

Par  of  Exchange  fbu 

Pas-*  Book  «o* 

Past  Consideration  •«* 

Pawnbroker    f'f 

Payment    ?*» 

Place  of  Business 8W 

Pledge    »=f 

Possession    °9i 

Presentment  »m 

Presumption     |J» 

Presumptions  of  Fact 89-J 

Presumptions   of   Law °94 

Prima  Facie  ?9o 

Private  Corporations    *« 

Public  Corporations   j*™ 

Principal   °9a 

Printed  Forms   89b 

Proceeds    °99 

Promissory    Note jW-J 

Protest    yu<1 

Qualified  Indorsement  7°i 

Real   Estate  Broker 273 

Receipt   94j 

Redraft  947 

Re-exchange    •"' 

Restrictive    Indorsement 'U4 

Ship   Broker   273 

Shop  Books  989 

Simple  Contracts   *?(j 

Sole   Corporations    *» 

Solvent    99s 

Special  Authority   i™ 

Special   Indorsement   <J|* 

Stock  Broker  2i4 

Tender    1028 

Unlimited  Authority  153 

Usuary 1°5U 

Valuable  Consideration  344 

Value  Received  10al 

GENERAL. 

Abatement  5 

Abstract    » 

Abstract  Ledger  Jj 

Abstract   of  Postings 4b2 

Acceptance    J 

Accident  insurance  Cash  Book «<" 

Accommodation     8 

Accommodation  Note  8 

Account    1U 

Accountant    13,  2b 

Accountant's   Accounts 24 

Accountant's  Apprentice  16 

Accountant's  Associations  14 

Accountant's  Certificate  (See  Auditor- 
Accountant's  Investigations 19 

Accountancy    25 

Accounting    25 

Accounting  (Ethics   of) 26 

Accounting  in  France  19 

Accounting  (History  of) 27 

Accounting  in  Italy    IS 

Accounting  in  Russia   18 

Accounting  Systems  29 

Account  Books   29 

Account  Sales    34 

Accounts  Payable    10 

Accounts  Payable  Account  35,  36 

Accounts  Payable  Book    35 

Accounts  Payable  Ledger    J92,  919 

Accounts   Payable   Record    1051 

Accounts  Payable  Register    919 

Accounts  Receivable    254,  393 

Accounts  Receivable  Account    

( 10,   34,   35,   119  475 

Accounts  Receivable  Book 35 

Accounts  Receivable    Discounted 122 

Accounts  Receivable  Ledger 81 

Accounts  Science  of 25 

Accrued    36 

Accrued  Wages   171 

Acknowledgment    37 


Acquittance    *' 

Acquittal 37 

Active  Partner  38 

Actuary  39 

Addition    39 

Addition  Drill  Tables 39,  40 

Addition  (Proof  of)  See  Check  Figure- 
Additions   and   Betterments    39 

Adequation    47 

Adjust    40 

Adjusting  Books  ••  40 

Adjusting   Entries    41,  392 

Adjusting  Fire  Loss  (See  Fire  Ins.)—  „ 

Adjustment  Account.  ...10,  35,  41,  431.  748,  749 
Administrators'  Accounts  (See  Execu- 
tors' Accounts)— 

Ad    Valorem   47 

Adventure    48 

Adventure   Account    48 

Advertising    49,  66 

Advertising    Account 64 

Advertising   Index ™ 

Advertising   R  cord    849 

Advertising  Results— How  to  Register....  53 

Agenda  Book  ™ 

Agent   6 

Agents'  Accounts 66,  266-2b8,  270 

Agreements  (Subscription)  76 

Aggregate  Corporations  356 

Agricultural     Implement     Business     Ac- 
Counting  &0 

Ale  or  Beer  Measure  81 

Aliquant    °« 

Aliquot    ••  £- 

Aliquot  Parts,  Table  of 82,  83 

Alligation    °* 

Allotment    °£ 

Allotment  of  Shares «j 

Allowance  5.  84.  9*5 

Alphabetical    Reference    lu< 

Alteration  of  Cnarter  

Amalgamation   (See  Consolidation)— 
Amendments  to  Articles  of  Association.. 
American  Association  of  Public  Account- 


85 


ants 


17 


American  Balance  Sheet  168 

Amortization  Table    88 

Amount  °' 

Analysis  of  Ledger  °8 

Annual  Statement  8* 

Annuitant     ; 

Annuities    „,  S 

Annuity  Calculations  90,  91-9o 

Anticipated    Profits    520 

Anticipating  Bills    95 

Antiquity   of  Book-keeping 27 

Apothecaries'    Weight    98 

Application    9° 

Application  for  Shares  98 

Appraise  98 

Appraiser    99 

Appraisement  Instructions  402-404 

Appraisement  Record  399 

Appreciation    99 

Approbation  Sales   »» 

Approbation  Sales  Account  • 

Approbation  Sales  Book  99 

Approval    Sales    99 

Approximate  Inventory  101,  738 

Architects'  Accounts  101 

Architects'  Certificate   102 

Arithmetic    102 

Arithmetic  (Amusing)  102 

Arrangement    of    Accounts    (See    Classi- 
fication)— 

Arrears     106 

Articles  of  Association  (Bank) 175 

Articles    of    Copartnership 115 

Articles  of  ncorporation 106 

Assessment    117 

Assessment  Record  118 

Assets 115.  604,   635,  637.  883,  950 

Assignees'    Accounts   122 

Assigned  Accounts   122 

Association,   Articles  of   106 

Associated  Accountants  of  New  Orleans.  19 
Assurance  (See  Insurance)— 

Attorneys'   Accounts   124 

Auctioneers'  Accounts  151 

Audit    125 

Auditing    125,  151 

Auditor    13a 

Auditor  (Permanent  of  Corporations)..    .  141 

Auditors'   Certificate    *  140 

Authorized  Capital   283 


Auxiliary  Books 153 

Average    153 

Averaging  Accounts  154 

Average  cost  480 

Bank  Order:    161 

Bad   Debts   161 

Bakery  Accounting s 162 

Balance    ••  163 

Balance  Account  11,  12,  41 

Balance  (Hank)    234 

Balance  (Cash)    302 

Balance  (Daily)    163,  407 

Balance  Ledger   44,   163,   9S7,  995 

Balance  Ledger  (Bank)   188,  2uo 

Bal    ace  Sh.H't UN,   KM.   21!,   22S,   2tio,   267, 

268,  281,  283,  471,  647,  6S7,  952,  978,  1005,  1047 

Balance  Sheet  (Auditing)   174 

Balance  Sheet,  Bankruptcy  Form 243 

Balance     Sheet     (Classification     of     Ac- 

counts)    165 

Balance  Sheet  Components 165 

Balance  Sheet  (Double  Account  System).  169 

Balance  Sheet  (Daily) 977 

Balance  Sheet— How  to  Prepare 165 

An  Example. 

Balance  Sheet— Items  to  <be  Certified  to..  174 

Balance  Sheet  (Peculiar,   and  Criticism).  173 

Balance    Sheet  (Report  Form)  173 

Balance  Sheet,   Reserve  and   Surplus 164 

Balance  Sheets    and    Statements    of    Af- 
fairs i •••••  172 

Balance  Sheet  (Working  Form)    173 

Balance  (Trial),  see  Trial  Balance- 
Balancing  Accounts  174 

Bank  Account   174,  295,  298,  299,  947 

Bank  Accounting  174-239 

Bank  Accounts  Books 187,  234 

Bank  Articles  of  Association 175 

Bank  Balance    234 

Bank  Balance  Ledger 188,  200,  749,  1026 

Bank  Balance    Sheet 228 

Bank  By-Laws     183 

Bank  Circulation   182 

Bank  Collateral  Account 234 

Bank  Directors    18f 

Bank  Discount    234,. .466 

Bank  Draft    235 

Bank  Examinations  23a 

Bank  Exchange  235 

Bank  Ledgers   240 

Bank  Machine  Office  Weigh  Book 825 

Bank  Machine  Quantity   Book 825 

Bank  Organization  175,  220-223 

Bank  Pass    Book    242,  947 

Bank  Reconciliation 230 

Bank  Securities   ••■•  -?4 

Bank  Statement    214,  228 

Bank  Teller  215"i£2 

Bankruptcy  Law  242 

Barge  Register  244 

Bear  244 

Benevolent   Societies    244,  356 

Betterments  and  Additions  .•.■■•.■  245 

Bill    10,  245,  740 

Ball  Book   246 

Bill  Clerk    246 

Bill  of  Exchange  246 

Bill  of  Lading  248 

Bill  of  Sale  

Billing    246,    845-848 

Bills  Discounted    246,  351 

Bills  Payable  249 

Bills  Payable  Register    249 

Bills  Receivable  249 

Bills  Receivable  Account  472 

Bills  Receivable  Register    81,  246 

Bills  Receivable  Register  and  Ledger 250 

Bills  Receivable  Suspense  Account 251 

Binding  34 

Blank  Book 29 

Blank  Endorsement  251 

Blanket  Mortgage  251 

Blotter   251,  889 

Bond 251,  6G5,  829.  833  948 

Bonds  (Coupon)   383 

Bonds  Debt-rum  re   414 

Bonds  Deferred  422 

Bonds  Guarantee  066 

Bonds  Mortgage  829 

Bon. is  Municipal  833 

Bands  K<  mistered  948 

L  stock  Register 2.r,2 

Bonus    254 

Book  Account  254 

Book  De-bt  254 


Book-keeper    zo, 

Book-keeping  

Boot  and  Shoe  Accounting 261 

Boston  Bank  Ledger 266,  : 

Bought  Invoice  Book   266, 

Branch  Business  Accounting 

Branch  House  Accounting 954 

Branch    Office   Accounting 329 

Brewery  269-272 

Brickwork  Measurement  272 

Bridge  Business  Accounting  272 

Brokerage    273 

Brokers'   Accounting 275 

Brokers'   Commission   337 

Bucket   Shop    283 

Builders'  Accounts  27b 

Buildings   Account    275 

Building  Society  Accounting 275-283 

Building  Society  Journal 279 

Bullion    285 

"By"   283 

By-Laws   (Bank) 181 

By-Laws   of   Corporations   (See   Article* 
of  Incorporation)— 

Calls   

Call  Register  283 

Capital    283,    604,  740 

Capital  Account  390 

Capital  Account  on  the  rialance  Sheet 287 

Capital  Expenditure   287 

Capital    Expenditures    (Railroad) 1003 

Capital  Receipts  288,  700 

Capital  and  Revenue  288 

Capital  Stock  977 

Capital   Stock   Unsubscribed 1038 

Card  Index  65,  315,  393-395,  702 

Card   Ledgers    289 

Card  Systems. 29,  65,  66,  75,  226,  227,  275,  289, 

314,   333,   335,   377,   555-570,    693,    708,    789-804, 

847  879,  956,  101a 

Carting  Business  Accounting  2x9 

Cash  292 

Cash  Assets  604 

Cash   Balance   Book   302 

Cash  and  Bank  Account 295,  297 

Cash  Book 257,  387,  430,  526,  602,  681 

Cash   Book    (Bank) 188,  ,  213 

Cash  Discount  95-98, r  429 

Cash  Journal  302,  755,  1027 

C.   O.   D 302 

Cash  Price  303 

Cash  Registers  327 

Cash  Sales  303,  475,  768,  770,  777 

Cash  Voucher  3H3 

Cashier   304 

Cemetery  Accounting  304 

Certificate    (Architect's) 102 

Certificate  of  Deposit  (Banking) 195 

Certificate  of  Deposit  Register  (Bank)...  189 

Certificate  (Stock) 304 

Certified    Checks 304 

Certified  Public  Accountant   17 

Certified  Public  Accountants'  Act 17 

Certified   Statement   306 

Chain  Measure  306 

Chalk   Pits    306 

Changing  from  Single  to  Double  Entry..  953 

Charge 10,  306,  o04 

Charge,    Fixed    306 

Charitable   Institution  Accounting 308 

Charter    307 

Charter  Party    307 

Chartered  Accountant   14 

Chartered  Accountants  of   Scotland 16 

Chartered  Accountants  of    Ontario 17 

Chartered  Accountants  of  Nova  Scotia..  17 

Check   304,   300,   307,  392 

Check   Endorsements    308 

Check  Ledger  308 

Check  Marks  308 

Check  Register  174,  309 

Check           terns    310 

Checking  Postings    462 

Church   Accounting   312 

Capital   286 

Cistern    Measure    317 

City  Accounting  314 

claim    Book   (Insurance) 759 

Claim    Department    145 

Clandestine   Stock 317 

Classification   of   Accounts 317,  919 

Classification    of    Accounts    (on    Balance 

Sheet)  163 

Classification  of  Assets  and   Liabilities.. 
1013,  1044.  1046 


Classification  of  Mining  Accounts  

808,    809,    822,  823 

Classification  of  Mining-  Expense 811 

Classification     of     Operating     Expenses, 

qX.c      808,  809 

Classification   of  Publishers'   Accounts...  919 

Clearing-  House    ?20 

Clearing  House  Due  Bill  (Bank) 217 

Closing  Entries  320,  3.3 

Cloth   Measure    32i> 

Clothing  Business   Accounting fo 

Club    Accounting    3-7 

Coal   Business  Accounting jS28 

Collateral     331,  692 

Collections 208-211,    331,    059,  958 

Collection   Book '71 

Collection   and    Exchange 331 

Collections  of  Notes  and  Drafts ^20 

Collection  Record   (Bank) 22b 

Collection   Register 331 

Collection  Register  (Bank) 192 

Collection    Symbols ^ 

College   Accounting    33o 

Colliery  Accounting  409 

Colliery  Weigh  Book 825 

Color     33o 

Columnar   Books 336 

Columnar   Journal ;••,■,  ■•  •" 

Columnar  System H,  30,  42 

Combined  Voucher  and  Check 10o2 

Commercial  Reports   337 

Commission    3°7 

Commission  Account 337 

Commission  and  Brokerage ?3i 

Common   Stock j*41 

Comparative    Statements o41 

Comparative   Statistics    312 

Compound    Average lbtS-159 

Compound   Interest '33 

Conditional    Indorsement 342 

Consideration  343 


.0,  223, 


168 
351 
35] 
393 
160 
351 
770 


Consignments     34 

Consignment  Accounts « 

Consignor    348 

Consolidations   £3° 

Consols   (English) ••    351 

Construction  Account 3ol,   491,    9S3 

Construction  and  Equipment  Account —    4i 

Continental  Balance  Sheet  

Contingent    Assets 

Contingent    Fund 

Contingent    Liability    3ol, 

Con  to   Currento  Method 

Contra   

Contract  Book  

Contracts    Unfinished 353 

Contractors'    Accounts 354 

Controlling  Account B,  35    351,  4Uo,  410,    431 

Copartnership    S5^ 

Copartnership,  Articles  of U| 

Copyrights    &>o 

Corn  Measure   3-..o 

Corporations     ••    j*5*) 

Corporation   Accounting S 

Corporation  Aggregate   ;;ob 

Corporation  Capital   -°4 

Corporations,   Charitable  oob 

Corporations,  Domestic — 3o6 

Corporations,  Double  Liability 

Corporations,   Foreign    

Corporation    Law 

Corporations,  Limited  Liability 

Corporations,   Private 

Corporations,  Public   

Corporations,    Sole 

Corporation  Stock  Account  Books  — 
Correspondents'  Accounts  (Banking) 
Correspondence  Register  

Cost   Accounting 

Cost  Classification  (Boots  and  Shoes)....  539 

Cost  Ledger  382 

Cost  Marks   382 

Cotton   Measurement 382 

Cotton  Mill  Accounting   382 

Counting  House 383 

Coupons    3S3,  418 

Coupon  Bonds $83 

Country  Checks   331 

Creamery  Business  Accounting 3S4-390 

Cr .. 390 

Credit   390 

Credit  Book   392 

Credit  Journal 84.  650.  745 


356 

357 

356 
356 
356 
374 
195 
376 
3s2 


H, 


.197,  212, 


Credit  Ledger 

Credit  Reports 

Credit  Sales 

Credit    Vouchers 

Creditor    

Cross    Addition    

Cross  Entries  

Cross  Entry  Journal  

Crossed  Check  

Cubic,   Measures , 

Cumulative  Preference  Stock 

Cumulative  Stock  

Currency,     Foreign     (See    Foreign     Cur- 
rency)— 

Current  Account  11 

Customers'    Accounts 

Customers*  Ledger  81,  265,  393, 

Customers'  Lists  

Customers'    Records 394 

Customers'  Signatures   226 

Custom  House  Accounting 397 

Daily  Balance  , 

Daily  Balance  Book 228 

Daily   Balance  Ledger   

Daily   Balance   Report 

Daily  Balance  Sheet 

Daily  Bank  Statement  

Daily   Sales   Abstracts 

Dailv    Statement 

Daily  Statement  Book  (Bank) 189, 

Day  Book  

Days  of  Grace 

t  Dead    Account 

'  Dead    Rent 

Death  of  Partner 

Debentures   414, 

Debentures,  Accounts  and  Records  of — 

Debenture  (Redeemable) 414, 

Debenture  Register 

Debenture  Sold  at  a  Discount 

Debenture  Stock  and  Bonds 

Debits    

Debit  Ledger  

Debt    

Debtor   

Deferred   Annuities 

Dfeerred  Bonds  and  Stock " 

Deficiency  Account  

Deficit  

Delinquent  Stock    

Delivery  Clerks'   Statement 

Delivery    Receipts    

Delivery  of  Stock  and  Bonds 

Demand,   Exchange 

Demand   Note    

Demurrage     

Department  

Departmental  Accounting  

Department  Store  Accounting  426, 

Department   Summaries    

Deposit  Scratcher  (Bank) 

iition....ll,  81.   171,  449.  704,  S64,  981, 

Depreciation  Colleries    

Depreciation  Freehold  Building 

Depreciation  Freehold  Land 

siation  Investment   

Depreciation   Landlord's  Fixtures 

Depreciation  Machinery  152,   453, 

Depreciation  Mines  

Depreciation  Plant   

Depreciation  Patents  

Depreciation    Ships 

Depreciation   Repairs    

Detection  of  Errors  

Dingley  Tariff  

Directors    

Discount   

Discount  6?°    849, 

Discount    (Banking)     

Discount   Column    

Discount  and  Freight 9.,  464, 

Discount  Register   

Discounting    Bills 

Discounted  Notes  

Discount  Register  (Bank) 

Distribution  Account 

Distribution  of  Costs   

Dividends    12,   392,   467.   712, 

Dividend   Book    

Dividend  Book  (Bank) 

Dividend  on  Preferred  Stock 

Dividend  Tickler  

Documentary  Exchange  

Domestic  Corporations    

Donation  Account   


....  475 

. . . .  84 
392,  892 
....  677 
392 
130 
392 
392 
::9J 
665 


393 
393 
421 

39.; 
395 


407 

407 
977 
214 
407 
408 

214 

411 
411 
412 
413 
413 
874 
414 
LI 
418 
420 
414 
421 
421 
421 
42] 

93 
1.2 
413 
284 
421 
322 
425 
424 
CI  3 
426 
426 
426 
6S0 
443 
430 
199 
991 
459 
4.31 
451 
452 
453 
454 
452 
452 
452 
453 
453 
461 

47 
464 
464 
1031 
196 
464 
465 

36 
1  7 
190 
4.1 
L45 
892 
755 
193 
467 
755 
607 
350 
471 


Dormant  Partner ••;••■; }2n 

Double  Account  Balance  Sheet Ib3 

Double   Average    ■•■  Ji™ 

Double  Entry   &<  5'1 

Double   In, lex    • «* 

Double  Liability  Corporation M 

Double  Posting  j» 

Double  Slide   461 

Doubtful   Accounts    *" 

Drafts   (Banking)..... Jjg 

Drafts  Register  (Hank) 1°9 

Drug  Business  AccounUng  4(3,  4, 

I  >!•>■  Measure  


477 


Due  Bill 


477 


Due  Bills  (Banking) J^a 

Duplicate  4'' 

Duplicate  Billing  System  99 

Duplicate    Parts    °± 

Duplicate  Order  System »4a 

Earnings  (See  Profits)— 

iv   (of  Labor  in  Devising  Forms, 

etc  ) 4(8 

Educational 'Association  Accounting 481 

Electric  Light  Company  Accounting. . ..481-518 

Employes'    Ledger   519,    6G6 

Endorsed   Bonds   519 

Endorsement  844,    950 

English  Money  (See  Coins)— 

English  Register  Company  Balance  Sheet    169 

Entry  Clerk • 519 

Equal  Payments  of  Principal  and  Inter- 

: • ••    733 

Equation    of    Payments    (See    Averaging 
of  Accounts)— 

Equipment    39 

Equipment  Account  500 

Erasures  520 

Error  Accoumt    54) 

Errors  (See  Detection  of  Errors)— 

Estimate  Book   •  ••    769 

Estimated  Profits   520,    860 

Examination    (Bank) xv^v    Izl 

Exchange   522.  607-619,     8C0 

Exchange     See  Collection  and  Exchange)— 

Exchange  (Demand)  613 

Exchange  (Documentary)   607 

Exchange    (Sterling)    £08 

Excise    523 

Executors'   Accounting   52o 

tits   471 

Expendi'ture  Accounts  959 

Expense  523,    844 

Expense  Account 145 

Exp.  nses  Distinguished  from  Assets. .UN,    119 

Expert   Accountant   52a 

Express    Traffic    (Railroad) 1017 

Pace    Value 860 

Factory  Assets  •■    53a 

Factory  Cost  Accounting  529-581 

Factory  Premium  Plan    565 

Factory    (Nomenclature) 575-581 

Family  Ledger  696 

Fictitious  Assets  d°£ 

Fictitious   Dividends    5S2 

File  582 

Financial   Books   255 

Financial  Statements   255,   oU     583 

Fire    Insurance  Accounting 5S3-593 

Fire  Insurance  Adjustments  593 

Fire  Insurance  Average  Clause  and  Op- 
eration        59a 

Fire   Insurance  Loss   «>93 

Fire  Insurance  Record  ■  ■    755 

Fish  Business  Accounting  (Wholesale).  59a-604 

Fix.  .1  Assets  H'j...«;m} 

Fixed  Capital  287.    604 

Fixed  Charges  :;'"'.    ,:1' 

Fixed  Liabilities  xy-^y  ■■„•/„•    S2I 

Fixtures   604.  624,  747,     798 

Flat  Opening  Books  •■••      fj 

Floating    Assets U9,    W 

Floating   Debt b«5 

Flour  Mill  Accounting  60a 

Fluctuation  of  Assets   606 

Folio    606 

Footing   bub 

Foreign  Collection   Booh  (Bank) 210 

Corporations   858 

Foreign  Credil   Booh  (B  ink) - 

Foreign    Exchange -619 

n  Money  (See  Coins)— 

Foreign  Bcratoher  r13 

Forfeited  Stock   '•-°, 

Forward  Agent  (Railroad) 1006 

Foundry    80 


Foundry  and   Machine  Shop  Accounting.     62« 

Freehold  Building  (Depreciation) 451 

Freehold  Band  (Depreciation)   451 

Freight    621 

Freight  Book  Tl\ 

Freight  and  Discount  465,    621 

Freight  Received  Abstract    1008 

Freight   Record    990 

Freight   Traffic    (Railroad) 1006 

Fruit  Growers'  Association  Accounting.622-o24 

lire  and  Fixtures 624 

Funded  Debt  624 

Futures  624 

Gain     624 

Gas  Company  Accounting . .  -  -626-632 

General  Ledger  41,  213,    Mi 

Gold  (Price  of)   618 

Good-will     634 

Government  Bonds  *>* 

Days  of  •    637 

Grain  Business  Accounting -642 

Grain  Elevator  Accounting 642-648 

Grocery  Business  Accounting 648-664 

Gross  Amount  87 

Gross  Profits   664 

Gross  Profit  Book  3S9 

Guaranteed  Bond  665 

Guaranteed  Accounts   -$™ 

Guaranteed  Stock  •  •    6bo 

Guests'   Ledger  (See  Hotel  Accounting)— 

Hands'  Ledger  ■•■•    666 

Hardware    Business    Accounting 666,    t>7t 

Hay  Measurement  b'b 

Hire  Purchases  (See  Installment  Account- 

"Home  Study"  U 

Horizontal  Addition   677 

Horses,  Depreciation  of  ••  677 

Hosrital  Accounting   VTbSX 

Hotel   Business  Accounting 080-092 

How  to  Advertise  « 

Hypothecated  Securities  692 

Ice  Company  Accounting  C93"?$ 

Impairment   ™ 

Impaired  Account   •■  !_Ja 

Impersonal  Accounts   .-11.  'OU 

Implement      Manufacturing      Accounting 
(See  Agricultural  and  Hardware)—   _ 

Impression  Book '""■  'i' 

"Impresf    Petty    ('ash    System 878 

improvement   5?" 

Income    -: • • ™* 

Income  and  Expenditure  Account (00 

Incorporation  (See  Corporation)— 

Incorporation,  Articles  of ™ 

Incorporated   Accountants    • la 

Incorporated  Accountants'  Journal 15 

Index  a61,   (01,  765 

Index  to  Advertisers  )* 

Index  Ledgers  •■  •  ■  i  '- 

Individual    Account    

Individual    Bank  Ledger   20/ 

individual  Ledger •••■  '^ 

Individual   Ledger   (Bank) 189,  19a 

Individual   Proprietorship   «« 

Indorsed  Bonds   !.".' 

Ink    *?J 

Installment  'S' 

Installment  Book ■..•■ ■•■•  L  0 

Installment  Business  Accounting 07,  712 

Installment  Dividend    ■■•■  <" 

Installment    Interest    •"•  ji- 

Installment  Lease  •  ■  •  ■:>- 

Installment  Note  »■  L  - 

installment  Scrip  ., -••• '  - 

Institute  Of  Accounts  at   N--\v  fork 19 

institute    Of    Chartered    Accountants 14 

Institute   Rules  and   Regulations ..  15 

Institution   Accounting    70S 

Insurance  ■;•  ■  '£" 

insurance   A.ocoun1 on,  rcu 

Vccountmg -0 

insurance  Expiration  Record  n-a 

Insurance   Record   (Bank) 226 

Insurance  [Jnearned :« •'■»<.  -r.- 

intere   1    LI.   rc3-735 

Interest    Accrued    gg 

[ntere  1  on  CapJtaJ  .. »« 

int.-r.-  1    m   Dallj    Balances  _■    7a 

st  :'<"s  ■■■■ ra*-7*0. 

interest   and   Discount    Account i> 

interest  on  installment. U,    712 

Interest  on  Profits  Not  Drawn  Out 171 

Interest  Rules  .31-, 33 


Intrinsic  Value  of  biuoa  735 

Inventory 1o,  lul,  12o, 

121,  327,   410,   735,   740.   800.   843,   1018-1020 

Inventory  Approximate   738 

Inventory  Book  739 

Inventory  Perpetual    738 

Investment  740 

Investment  Account  48,  740 

Investment  (Depreciation)  452 

Investment  Fund  740 

Invoice   245,  740,  788 

Invoice   Book    741,  825,  850 

Invoice  Copy  Book  741 

invoice  Journal   430 

Invoice  Ledger 741 

Invoice  Record  399 

Iron  Business  Accounting  741-743 

Itemizing  742 

Itemized  Statement  742 

Jobbing  Business  Accounting 742 

Joint  Stock  Company 744 

Journal  256,  411,  472.  744,  919 

Journal    (Bank)    213 

Journal  Cash  Book  213 

Journal  (Cross  Entry)  430 

Key  Figure  (See  Check  Figure)— 

Labor  Account  747 

Landlords'  Fixtures  (Depreciation).... 453,  747 

Laundry  Business  Accounting 747 

Lawyers   (Accounting   Methods   for) — See 
Attorneys'  Accounts. 

Ledger  81,  389,  673,  674,  748 

Ledger  (Abstract)    6 

Ledger  (Alternating)   149 

Ledger  (Bank)   240,  241 

Ledger  (Boston  Bank)   202 

Lerger  (Check)   308 

Ledger  (Cost)  382 

Ledger  (Customers')   265,  393,  421 

Ledger  (Daily  Balance)  407 

Ledger  (Employes')    519 

Ledger  (Family)    696 

Ledger  (General)  633 

Ledger  (Hotel)    1027 

Ledger  (Perpeitual)    875 

Ledger  (Petty)     879,  1022 

Ledger  (Plant)    883 

Ledger  (Private)    898 

Ledger  (Purchase)    919 

Ledger  (Sales) 388 

Ledger  (Self  Indexing)    1022 

Ledgerettes    951 

Legacy    750 

Legal  Book-keeping  (See  Attorneys'  Ac- 
counts)— 

Legal  Costs  750 

Legal  Interest   723,  751 

Liabilities    604,   752,  850 

Liability  Ledger  (Bank) 192,  208 

Libraries,  Accounting  for  752 

Life  Annuity    90 

Life  Insurance  Accounting  753-761 

Life  Insurance  Americal  Mortality  Table.  759 

Life  Insurance  Investments  761 

Limited  Corporations  (See  Corporations) — 

Limited  Liability  Corporation 357 

Limited  Partnership  (See  Partnership)— 

Linear  Measure   762 

Liquid  Measure  762 

List  Prices  764 

Live  Stock  Account  762 

Livery  Business  Accounting   762-764 

Loan  Account   764 

Loan  and  Savings  Bank  Accounting 764 

Loan  Record  2S0 

Loan  Record  (Savings  Bank) 975 

Location  of  Errors  461,  764 

Logismography  764 

Long  Measure  764 

Loose   Leaf   Ledger   1042 

Loose  Leaf  Ledger  Index 702 

Loose  Leaf  System  29,  42,  764-766 

Loss  and  Gain  (See  Profit  and  Loss)— 
Lumber  Business  Accounting 766-779 

Machinery  Account  780 

Machinery   (Depreciation) 452,  453,  454 

Mail    Orders    847 

Mail  Order  Business  53-56,  780-788 

Mail  Transportation  (Railroad  1017 

Maintenance  Account 500-508,  788 

Maintenance  of  Way  493 

Manifest    788 


Manufacturers'  Accounting 529-5S1,  789-804 

Manufacturing  Costs  80,  804 

Manufacturing  Ticket   434 

Manuscript  Record  804 

Marking  Goods  382 

Market  Value  735,  806 

Margin  806 

Mariners'  Measure  806 

Material  Account  80 

Maturity  Record  806 

Memorial   28 

Mercantile  Balance  Ledger  1026 

Merchandise    806 

Merchandise   Account   737,  806 

Meter  Ledger  625 

Meter    Ledger    (See    Gas    Company    Ac- 
counting)— 

Metric  System  807 

Mill  Lumber  Book  772 

Mill  Stock  Book  389 

Minimum  Rent   306,  413,  808 

Mines  (Depreciation)  452 

Mining  Company   Accounting 808-826 

Mining    Classification    318 

Minute  Book  187,  827,  995 

Mixing  Qualities  or  Values  82 

Monetary  Table  (See  Coins) —  C 

Monthly  Abstract  Sales 825 

Monthly   Statement   827 

(See  Trial  Balance  and  Balance  Sheet) — 

Mortgage  829 

Mortgage  Bond   829 

Mortgage  Debenture  414 

Mortgage  Record  755 

Mortgage  Register 975 

Mortality  Cards  755 

Mortality  Table   91,  755 

Multiplication     103.  829 

Municipal  Accounting 414,  420,  456,  8.°0-833 

Municipal   Bond 833 

National  Association  of  Accountants  and 

Bookkeepers    19 

National  Association  of  Credit  Men 391 

Negative  Account  11,  833 

Net   836 

Net  Capital   936,  898 

Net  Profit   75,  836 

New  York  Daily  Balance  Ledger 241 

New  York  State  Society  of  Certified  Pub-  t 

lie  Accountants   17 

Newspaper  Accounting  834 

Nomenclature   (Accounting)    836 

Nomenclature  (Factory)  575-581 

Nominal  Account  11,  836 

Nominal  Capital   283 

Nominal  Ledger  11,  836 

Nominal   Partner    836 

Non-Assessable  Stock  836 

Non-Commercial  Accounts  

Non-Cumulative  Preferred  Stock  837 

Note  1,  8,  837 

Note  Book   (Audit) 837 

Note  Tickler  206 

Note  Tickler  (Bank) 192 

Notes  Discounted  351,  837 

Notes    Payable 837 

Notes    Receivable 837 

Novation    839 

Numerical  Index  662 

Numerical  Reference 662,  839,  1028 

r 

Obsolescence  .'. 839 

Offering  Book  (Bank) 191,  205 

Ofhcers    of    Corporation    and    Duties    of 

See  Corporation)— 
Ohio  Plan   (Building  and  Loan  Associa- 
tion)    277 

Oil  Company  Accounting  839,  843 

On  Sale  843 

Open  Account   844 

Open  Endorsement  844 

Opening  Books  844 

Opening    Entries 

359,   363,   366,  369,   370,  371,  373,  844 

Operating  Accounts   493 

Operating  Capital  S44,  1065 

Operating   Expense   499,  S44 

Option    844 

Order    844 

Order  Blanks 425,  844 

Order  Blank  System 702,  844,<-966 

Order  Book  545,  769.  849.  852 

Ordar   Register   M» 


Orders    Unfinished    413 

Original    Entry    849 

Out  Advertising-  Record    849 

Outstanding  Discounts   849 

Outside   Broker   283 

Outstanding    Liabilities    850 

Overchargo     850 

Overdraft    201,  850. 

Over  and  Short  Account   850 

Packages  in   Bond    253 

Packing  House  Classification  319 

Paid    Up   Capital    851 

Paging    851 

Paper  Manufacturers'  Accounting  851-860 

Par    860 

Par  of  Exchange   860 

Partially    Manufactured    Goods    860 

Partner    38 

Partnership     860 

Partnership  Accounting-  860-864 

Partnership  Adjustment   40 

Partnership.   Articles   of   115 

Partial    Audit    860 

Partnership   Capital    284 

Partnership  to  Corporation   368-370 

Partnership    Deed    862 

Passenger  Traffic   (Railroad)    1011 

Passenger  Tickets  (Railroad)   1011 

Patents    355,  864 

Patents   (Depreciation)    452 

Patients'    Record    881 

Patterns    81.    7^9,  864 

Pay  Roll  532,  866,  874,  985 

Pav   Roll   Distribution   (Mining)    825 

Pay  Roll  (Mining)   809,  810 

Pay  Roll   Book   772 

Paying  Teller   215-218 

Paying  Tellers'    Settlement  Book   (Bank)  218 

Percentage    874 

Percentage  on  Turnover  874 

Permanent    Assets    874 

Perpetual    Ledger    875 

Permanent   Assets    1029 

Permanent  Plan  (Building  and  Loan  As- 
sociation)      276 

Perpetual    Debenture   Stock    874 

Perpetual   Inventory    ..81,  73S,  773,  800,  1018,  1046 

Perpetual    Lodger    764 

Personal    Account    11  875,  898 

Personal   Accounting-    875 

Personal  Estate   878 

Petty    Cash    17o  878 

Petty  Ledger  879,  1022 

Petty  Sales  Ledger   257 

Physicians'  Accounts   879-881 

Piece   Work    232,  566,  567,  574,  881 

Picture  Publishing  Business  881 

Plant    12,  883 

Plant   Account    780 

Plant    (Depreciation)    452 

Plant    Ledger    883 

Plantation    Business   Accounting- 883 

Plumbers'    Accounts    887-891 

Policy   Register   755 

Policy    Tickler    755 

Pool     891 

Position  of  Assets  and  Liabilities  on  Bal- 
ance Sheet  170 

Postage  Account  891 

Posting    66,    80^.,  892 

Posting  Checks    66 

(See  Check  System)— 
Practical    Working    of    Adjustment    Ac- 
counts    46 

Preferred   Creditors   892 

Preferred    Dividends   892 

Preferred  Stock  892 

Preliminary  Expenses   892 

Premiums  893 

Preparations   for  Audit 893 

Prescription    Book    880 

Present  Value    171 

i    Worth  893 

Prevention  of  Errors   463 

Price  of  Gold   618 

Pricing-  895 

Prime  Cosl    895 

rig  I  Justness  Accounting  896-898 

Private  Account    898 

Private  Corporations  356 

Private   Journal    898 

Private  Ledger  6,    10.633,  898 

Profit  „ 624,664.  899 


Profit   Estimated   901 

Profit  and  Loss  99,  899,  959,  1047 

Profits    Undisturbed    901,  1050 

Promissory    Note    246,  426,  712,  902 

Promotion   348,  351 

Promotion    Expenses    11,120,172,892,  903 

Proof    ;  904 

Proof   Book   257,  904 

Proof  Figures  310,  311,  904 

Proof  of  Posting   658 

Proprietors'    Account    904 

Pro-Rating   Advertising    Expenditures...  64 

Pro-Rating  Expenses  427,  546-554 

Proving  Accuracy   255 

Proving  Work  on  the  Books  461,  462 

Proving  Ledger  Separately  748,  749 

Public  Corporations   356 

Public  Library  Accounting  918 

Publishers'   Accounts    355 

Publishers'  Accounting  919 

Purchase   Account    12,    35,  919 

Purchase  Book  256,  387,  741,  982 

Purchase    Hire    System    (See    Hire    Pur- 
chases)— 

Purchase  Journal  430,  919 

Purchase   Ledger    741,  919 

Purchase  Ledger  and  Stock  Record  Com- 
bined     327 

Purchase  and  Operating  Expense  Book..  888 

Purchase  Record  35,  742,  919-925,  1051 

Purchase  Record  (Coal)  329 

Railroad  Accounting  925 

Railroad     Corporations'   Subscription 

Agreements   76 

Rapid  Addition 39 

Raw  Material  80,  925 

Raw  Material  Account  530 

Real  Account  12.  925 

Real   Estate  Accounting   925-945 

Refbate     945 

Recapitulation    66 

Receipts    945,  959 

Receipts  and  Disbursements  Account 281 

Receipts  and  Payments  Account 700,  946 

Receivers'  Accounts  947 

Receiving  Teller  219 

Receiving      Tellers'       Settlement      Book 

(Bank)     219 

Receiving  Tellers'   Statement  (Bank) 219 

Reconcilement  Book  (Bank)  215 

Reconciliation  Account  (Cash  in.  Bank)..  300 

Reconciliation   of   Bank   Account 947 

Reconciliation    of   Bank   Statements 230 

Reconciling  the  New  York  Account 230-234 

Record   Book   947 

Record  of  Customers  334 

Reduction  of  Capital  Stock 2S7,  947 

Redeemable  Dead  Rent  306 

Redeemable  Debentures   414,    421 

Redemption    Fund    947 

Rediscounts  (Banking)   195 

Register   948 

(See    Check    Register,    Order    Register, 
Collection  Register.) 

Registered    Bond    948 

Registration  Book  (Grain  Elevator) 644 

Registration  Book  (Hotel)    683 

Relinquishment  of  Capital  1066 

Remittance  Sheets    948 

Renewals  288 

Renewal  Note  948 

Rent  Account  948 

Rent  Accrued  Due  948 

Repairs    SI, 

Repairs,    Renewals   and    Displacements.. 

.- 39,  81  949, 

Representative  Accounts  12.  :!5, 

Reserve 171, 

Reserve  Fund  947,  949, 

Reserve  for  Bad  Debts    

Resources   950 

Restrictive    Endorsement    950 

Retail   Business  Book-keeping 473,950-953 

Retail    Yard,   Accounting  for   329 

Returns    958 

Revenue  958 

Revenue  Account    959 

Revenue   Accounts   959 

Revenue    Kxpendit  ures    596 

Revenue   Items   959 

Revenue   Receipts   595 

Reverse   Posting   463,  658.  959-963 

Revolving  Fund  689 


246 


171 


Royalty 306,842,  9M 

Royalty  Account   ■»* 

Royalty   expense   »?* 

Royalty   Income    3™ 

Ruling • »> 

Ruling  oi  Accounts   iLi 

Safeguard  System  ••  ^ 


.245,  475 
265 


701 
995 

29 


453 

509 


Account"     12>    34-  965 

Sales  Book   ,256,  430    597,  700,  767,  965 

Sales  Book  (for  Auctioneers) 152 

Sales  Book  (Coal)   *** 

la^^agerV::::::::::::::::::::::::^;^  966 

Sales   Sheet   (Department)    

Sales  Ticket  

Salesmen's   Accounts    

(See  Agents.) 

Salesmen's  Samples  •••  <* 

Sample  Account    .. <*•  '* 

Savings  Bank  Accounting  ?>  il?- 

Saw  Mill  Accounting  a  o«« 

School   Accounting    »B7 

Scrap    Book    »°7 

Scrip  Dividend   ••••  4bS 

Secret  Reserves   *■**>  aa' 

Secretaries'  Ledger g 

Secretaries'  Repo; .   (Society)   *ws 

Sectionalization   u 

S!Ct!?.na!:Z'?S42^4S320S,l0S;«i;446;«7\-748;    987 

Sectionalizing  Accounts   463 

Security ••••    ™* 

Self  Indexing  Ledger 70<S,  1022 

Self  Indexing-  System  •  •  •  • 

Self  Proving  Ledgers  • 98/, 

Self   Proving   System   

Selling  Expense • •••    <"» 

Serial  Plan  (Building  and  Loan  Associa- 

tion)  {}£ 

Settling  Clerk's  Statement  d£L 

Seven  Account  System  1^« 

Sewing  lilank  Books  j>£ 

Shares,  Allotment  of  °* 

Ship  Accounting  •»« 

Ship  Record   • ™) 

Shipping  Book  (Gran  Elevator)  b- 

Ships  (Depreciation)    

Shop  Expense  

Sight  Drax-s  ••••    -; 

Silent  Partner  471,    991 

Silicate  Extensions  on  Ledgers  241 

Simple  Average  £° 

Simple  Interest  ™* 

Single  Average    155 

Single  to  Double  Entry 9o3 

Single  Entrv  29,    991 

Sinking  Fund... 414,  416,  417,  624,  947,  949,  992-995 

Six  Per  Cent  Interest  Rule 731 

Sleeping  Partner  995 

Sliding  Scale  Debenture 417,    418 

Slip  System  463,658,    959 

Society  of  Accountants  and  Auditors —       15 

Societies,  Accounting  for  995-998 

Sold  Ledgers   44 

Sole-^Corporations    3ob 

Sole  Proprietorship  to  Corporation  370 

Speculative  Assets  119 

Standard   Classification  of  Electric  Rail- 
way Accounts   488 

Statement    659,    998 

Statement  of  Affairs  172,    998 

Statements  of  Assets  and  Liabilities 172 

Statistical  Records  255,    999 

Statistical  Reports   147 

Steam  Railroad  Accounting  1000-1018 

Sterling  Exchange  608 

Steward's  Book  (Hotel)  683,    686 

Stocks   620,  665,  S37,  874,  892  893,  1018 

Stock  (Inventory)  556,  1018 

Stock,  allotment  of  83 

Stock   Certificates    224 

Stock  Certificates  Book  (Bank) 187,    224 

Stock  (Delinquent)    424 

Stock    Dividend    468,  1018 

Stock  Donated  471,  1018 

Stock  Exchange  Rules  274,    275 

Stock  Ledger  225,  360.    773 

Stock  Ledger  (Bank)  187,  1018 

Stock  Record    180,532,1018 

Stock  Record  and  Purchase  Record  Com- 
bined      327 

Stock  Register  3*4 


Stock  Register  and  Transfer  Book  (Bank)   187 

Stock  Subscribed  98,  1018 

Stock  Ticket  •■••    434 

Stock-in-Trade    "35,  1018 

Stockholder  'iHiw    m 

Stores    5o6,  712    793 

Stores   Account    ijjjj 

Store  Keeper's  Journal   (Hospital) 717 

Storekeepers'  Report  (Hospital) 717 

Stores  Received  Book  827 

Stores  Record  V® 

Storage   • ,™J 

Storage  and  Warehouse  Accounting 1021 

Street  Railroad  Accounting 1021 

Street  Railway  Accounts  Classification  .    497 

Students'  Record  33o,    986 

Students'   Lectures   18 

Subscription  Account  3M 

Subscription  Agreements  ••••      «f 

Subscription  List 36b,  1021 

Subsidary  Books  •••  1021 

Sundry  Accounts  34,  loss 

Sundry  Expense   •••    ba 

Summary  ...ccount  "•  **»i 

Surplus    ■ 164.  283,  391,  664.  893,  1024 

Suspense    161-  1[)*\ 

Suspense  Account  •■••■    *'* 

Suspense  Ledger  1024,  1025 

Synthetic  Account  System  951 

Tabular  Ledger   749,  1021,  1024,  1027 

Tellers   (Bank)    ■• 1-* 

Telephone  Company  accounting  1027 

Terminable  Annuities »« 

Terminating    Plan    (Buying    and    Loan 

Assoc*  -tion)    j™ 

Theater  Accounting  •••  10£J 

Tickler  81,  1029 

Time  Card 102i» 

Time  Draft   ••••        ' 

Time  Record  5>".    <** 

Tools    ™g° 

Tools  and  Supplies *"£» 

Trade  Discount   ij™i 

Trade  Inciuirv  Form   1031 

trading  Account  8.3,  1031,  1035,  1047 

Transfer  of  Accounts  1035 

Transfer  to  New  Company 372 

Transportation  Accounts  u^u,  50b,  507,    508 

Transpositions    •  ■    461 

Transfer  of  Stock  ..20 2-204 

Traveling  Salesmen's  Account ^l0Jq-UU8 

Treasury  Stock  1038 

Treasury  Stock  Account  •  •  •  •    254 

Trial  Balanace  1039-X047 

Triplicate  Order  System   ••••    846 

True  --scount  ...466,  1047 

Trustee's  Account  (See  Assignee  and  Re- 
ceiver)— , 

Trust  Company  Accounting ••••:■;,•/  }°H 

Turnover  *«*.  1{J6i>  Ai*» 

Twelve  Per  Cent  Interest  Move 732 

Cncompleted   Orders   ••    520 

Undisturbed   Profits    aol.  1024 

Undivided  Profits  Account  low 

Unexpired  Insurance  £'* 

Unfilled  Orders  »*> 

Unfinished  Contracts  WO 

Unpaid  Vouchers  Account  ...............  1051 

Universities,  Accounting  for  (See  College 
Accounting)— 

Venture  Account  (See  Adventure)— 

Vessel   Account   ••• 

Voucher  '5^• 

Voucher  Record  ....35,  492,  493,  681,  9S6.  990, 

Voucher  Register  ViT-irci 

Voucher  System   29,  1051, 

Voyage  Account  

Wages  Account  •  •  •  • 

Wages  Accrued  "±> 

Wages,  Table  of  

Watered  Stock •■•• 

Waterworks  Accounting 1059- 

Wav  Bill  (Railroads) 1006 

Way  and  Structures  Account 

Wear  and  Tear  • 

Weeklv  Gross  Profit  Book  

Winding  Up  Partnership  ■••■ 

Working  Balanace  Sheet  . . ... . .... .. •  •  .173. 

Working  Capital  254,  285,  2bu,  4U. 

Workroom  Accounting lObb 


990 

1051 
1051 
987 
1058 


1058 
327 
1059 
1059 
1065 
1007 
500 
454 

413 

1066 
1066 


THE  AMERICAN  BUSINESS  AND  ACCOUNTING  ENCYCLOPEDIA. 


CASH     ORDER. 


Ninth  Edition. 


.190. 


To  The  Book-Keeper  Publishing  Co.,   Ltd., 
Detroit,  Mich. 
Gentlemen: — Please  find  enclosed  the  sum  of  Eight  Dollars,  for  which 
credit  me  with  one  year's  subscription  to  The  Book-Keeper  (from  date  of 
expiration)  and  send  me  one  copy  of  The  American  Business  and  Account- 
ing Encyclopaedia. 

Signature _ 

Address 


INSTALLMENT  ORDER  FORM. 


Ninth  Edition. 


190 


To  The  Book-Keeper  Publishing  Co.,  Ltd. 

DETROIT,    MICH. 

Gentlemen  : — Please  find  enclosed  the  sum  of  One  Dollar,  for  which 
credit  me  with  one  year's  subscription  to  The  Book-Keeper  (from  date  of 
expiration)  and  send  me  one  copy  of  The  American  Business  and  Account- 
ing Encyclopaedia.  I  agree  to  pay  the  balance  of  Nine  Dollars  in  nine 
monthly  installments  of  One  Dollar  each  on  the  following  dates  : 


MONTH 

DAY 

YEAR 

MONTH 

DAY 

YEAR 

1st 

190 

1st 

190 

1st 

190 

1st 

190 

1st 

190 

1st 

inn 

1st 

190 

1st 

190 

1st 

190 

And  it  is  also  hereby  agreed  that  the  Encyclopaedia  shall  remain  the 
property  of  The  Book-Keeper  Publishing  Co.,  Ltd.,  until  the  last  installment 
has  been  paid,  and  that  failure  to  pay  any  installment  when  due  shall  cancel 
this  agreement  and  make  the  unpaid  balance  of  the  purchase  price  payable 
on  demand. 

Signature. - - 

Address 


, 


Ewfc: 


r^4  -, 


Tl 


ERSITY  OP  CALIFORNIA  LIBRARY 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 


AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
THIS  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  50  CENTS  ON  THE  FOURTH 
DAY  AND  TO  $1.00  ON  THE  SEVENTH  DAY 
OVERDUE. 


OCT   26  tt4t 


OCT    27  1946 


OCT   27  1946 


LD  21-100m-7,,40 (6936s) 


Mk 


1 


■'■#>,  *kfW 


fu  v^mv 


vt: 


